Why is the arch cut off by the ceiling?

I would keep it mostly bare, but if you need some privacy I would do a simple duette/cellular shade or roller blind that matches the trim color. Place the blinds on the trim between the window and the arch. Done in the same white the shade will mostly disappear when opened.

I don't think you have room for an inside mount.

I think if you don’t need privacy you should leave them bare. If you do, two inside mount shades under the arch.

i can’t figure out what I’m looking at with your ceiling is it lower than the wall?

Are you planning on hanging that mirror and picture on either side of the window? I think a couple tall plants would be a better choice.