Here is a treatment with lots of space above the arch and it isn't bad. I know it is much higher than your windows, but I think you could pull this one off.

I'd take (semi-transparent) roller blinds and hang them on the top jamb. This way the round features would always be visible. The skylight would be open, don't know if that would be a problem..

These are not easy windows to deal with..,.shape is beautiful. I would concentrate my window treatment below the fan window,and within the frame . Anything else will be imposing a different, awkward border to the window and take away from the architecture of the window frame. Within the frame you could have shutters, roman shades, fabric blinds (Levolor has several to choose from or you could have a custom made blind in a fabric that compliments your furnishings. If the blinds have a pattern it could be picked up in pillows on your white couch.

I would make the TV wall more of a focal point and then the windows I would do an inside treatment and leave open the arch top. The space between the windows needs to be more substantial. Love the rest of your room!!!

Thank you all for your advice! I'm actually not crazy about the curved tops (I'm a rectangular-window-kind-of-girl), especially because they are not echoed anywhere else in the house. I'd prefer drapes over blinds/shades mostly to add fabric/texture to the wall, as well as warm up the space. (And I already found a fabric I'm loving). I'll discuss with my husband and see how he'd feel about blinds/shades though. They'd definitely be a simpler approach.

The other thing is, we don't really need to cover the actual windows since our backyard is so private. I like to see out there when sitting on the sofa.