I didn't love the collar and realized I could simply fold it over and sew it under the shirt (removing excess fabric) to create a whole new, and in my opinion more updated, look for the shirt. So here goes.
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Step 1: Sew Collar Over
Fold collar over along existing edge, pin down, and sew along the top seam to ensure the fold stays tight and flat.
In the second photo, you can see the original seam and the new seam running parallel to each other just along the right edge, which is the top seam around the neck of the shirt.
Photo 3 shows the blouse laying on its inside with the old collar folded back up to emphasize the new stitching.
Step 2: Sew Down Excess Fabric
Sew another seam along the bottom of the collar just above where you intend to cut off the extra fabric. This seam can be wherever you'd like it to be. I added this second seam at the shirt's existing seam along the bottom of the collar.
Step 3: Remove Excess Fabric
Cut off the excess portion of the old collar that was folded over to the inside but wasn't sewed down to the shirt.