When we removed the previous towel rack there were 6 dime sized holes in the walls. Our new towel rack wouldn't fit those holes so I decided to cover them up. I really wish I had snapped the before picture (or Rachel hyperventilating looking at 6 large holes in the wall) but I didn't.
I bought a 1 x 4 of maple? at Home Depot and routed the edges to make it more decorative. Then I primed it and attached it to the walls using toggle bolts, patched the mounting holes, painted it twice and attached the towel rack.
Who knew one little towel rack could have hours of work behind it?
Board just attached:
Primed (also notice new knobs previously mentioned installed):