I would put them below the arches.

yes, single panels below the arch, held to either side. something very lightweight so it isnt bulky when pulled to one side. and have the rods wider by a couple inches so the drape's butt isnt sticking out from the casing-mounted hold back.

How tall are the ceilings? I would be inclined to absolutely go above the arch.

They graduate over the top of windows from 8ft to 10ft. The windows are recessed a bit.

I agree with JMittman; mounting the treatment higher will take advantage of the great height that you have available and will look great and elegant.

Thank you both for the suggestion. Do either of you have any photos of an example -especially with using one panel each since windows so close to fireplace,