I think that window might be too arched for arched drapery rods even if you can find somewhere to make it. The drapes would just fall completely down unless you did some kind of tight pole pocket. You could do a drapery rod straight across under the arch.

Yes either above or below the arch.

Since it doesn't look like there's much of a view out the top arched part you could use a curtain gathered on a frame to permanently cover the arch and add panels below or a roman shade similar to this.

But probably not this frilly.