Translation:We have many big towels in the bathroom.
"(vaske)klut" is the default for all cloths and rags for cleaning, and then you make compounds to specify the intended use: ansiktsklut, gulvklut, støvklut, kjøkkenklut, vindusklut...
In some dialects, mainly in central and northern Norway, the word "tue" is used instead, but you won't find it in the dictionary.
N.B.: "Klut" can refer to any piece of cloth, so you will find compounds that are unrelated to cleaning, such as "gryteklut" which is a pot or kettle holder.
Also, I think a lot depends on context. If I'm at home and I say "Where's my towel?" then it would mean my bath towel (it would also mean that someone is going to be in trouble for moving it!).
If I had a guest and they asked for a towel it could mean any number of different towels, depending on whether they were planning to do the washing up or take a shower etc.