I'd replace the window. It's either very badly installed or designed or both. What should be a beautiful focal point would only be highlighted as how wonky it is by having the backsplash be different, or even the same with different amounts of wall exposure.

Thanks for the info... I truly appreciate the feedback. I have decided to go with Milgard Style Line for the project and am only going to have the lower sashes tempered. The chances of anyone falling into the windows would be slim at best. The only glass that stands a higher probability is the current Arcadia (sliding glass) door in my atrium but I am replacing it and the others in the house with Anderson 400 series gliders which all have tempered glass as standard.

Trimline is our choice when specifying historical restoration. They own the east coast historical replacement market. Trimline makes windows to the 1/8 with no custom upcharge. Michael Here is a link that might be useful: Historic Wood

NO built ins because when you can afford to fix this you won't want built ins on that wall. Get a piece of high quality plywood cut to fit in the half moon window. Paint it and the trim around it to match the walls. Then if possible remove the top molding on the 2 windows at least then the top will be straight. Remove the muntins as you don't have them in the other windows in the room