brutuses- I think hanging the treatments inside the windows defeats her purpose of framing them with the velvet, especially since she doesn't intend to use them for privacy or to block sun. If she were that would be the best option because you are right, that woodwork is fab! try_hard- First, let me say, I love your house, looks so comfortable yet, nice. My MIL did what mpmg46 suggested with her dining room windows since she wasn't going to close them either and didn't want to pay for a custom rod to be made (her window was wide too). It looks great unless you or your guests contemplate it and then it looks odd and I get stuck on the fact that they are in esscence faux curtains and can't ever be used even if you wanted to. Obviously, other people won't notice it or will get over it, but it bugs me everytime I see them. I would hang the rod above the woodwork myself, there is just no way around that middle bracket. You can't see how the rod is hung in that other room from this space can you? Oh, and a shopping tip! I just, like last week, bought two double wide PB velvet panels in espresso off Ebay for a total of $234.99 (including shipping). If I'd bought them from Pottery Barn I'd have paid $458 (on sale!) plus tax. So when you go to buy the drapes, it pays to shop around the internet if you have time. My MIL's window treatment:

To clarify my numbers. Take the width of the window. Add 10%., That's width x 1.1. Thar's how much the total width of the curtains will cover. When the windows are pulled back all the way so that the window is completely uncovered, the amount of wall that the curtains will cover is 10% of the width of the window. That is. you have to allow for, in your case, 14.7 inches of wall space to be covered when you open the curtains fully. This is for light weight unlined fabric. You will have more of the wall covered with heavier or lined fabric, according to the formula I gave in my previous comment. As for not being able to pull the curtains back over the needed supports for the curtain rod, you can get a curtain rod that will let you do so. You need to look for a specialty rod, not one where the rings surround the rod.

the first option is not old fashionable..it's traditional..a pretty classic one. it will be much more in line with your tastes as you explain them, than stacked stone you don't need to prolong the wall visually there-and the more massive fireplace will partially obscure the window..they're just too close I'd go with a first option..or variation of it..then I'd balance the window with an art over the fireplace that you love. The fireplace will also be lighter and read more natural. I'd consider window treatment as well. Do you need privacy there, light control? Maybe you can go for more stationary treatment, like one curtain pulled to the side. or maybe a stationary cornice..same color as the wall whatever it will be..will make window look shorter, more framed. In any case requires careful consideration. you'll have time to figure it out when your new freplace will be in; but start looking at the pics etc. the window seems a bit too tall..any reason for that? how does it look from exterior? do you need more light in the room? It dwafs the door a bit I know there are tricks to make a window seem shorter than it is..if that's what you'll decide to do..even with moldings..I don't remember enough about it right now though maybe you'll be interested in this blog https://laurelberninteriors.com/ (her taste is new traditional..she writes a lot about everything including windows, fireplaces, etc, and is an honest and amusing writer too) or in reading this author https://www.amazon.com/gp/product/0307408655/ref=oh_aui_detailpage_o08_s00?ie=UTF8&psc=1 he is famous for his work of combining traditional with modern touches. obviously he's opionated about some stuff because he explains his own style; but lots to learn and admire anyway

Given your stated preferences, I would put the type of curtain/fabric on your windows so that the stair window goes to its sill as you have it and then on all other windows , you go to the floor Having said that what bothers me about your photo is the square curtain on the lovely oval window, This just doesn't go along with the style of your house. Please consider some of the glass covering treatments as suggested by Nick Brown for this door window...