Love the Shoei pocket door! I am assuming you wish to keep the minimalistic look for the space. I would go with fabric roller shades inside and against the window, for reasons of simplicity and function and cost. You could go with light filtering or opaque. You would still be able to use the window sill for a decorative object or two if you wish - something that you would not be able to do with shutters. You mention wishing to block noise. If noise is an issue then cellular shades would help a bit more. Get ones with "fingertip lift" so that there are not tangle-y cords laying on the window sill or trailing down the wall when they are up. If you wish to maximize the view out, since the windows are so small, keep in mind that cellular shades will still block about more of the window than a roller shade will when up.

In that window, to make it work for your husband and you and allow you to control the light, I would use wooden blinds that match the trim (and a shade lighter if you can't make it exact) with attractive tapes. I'd use very light-weight ones, and use the widest slats I could make fit, because it takes fewer of the wider ones per shade, which means that they stack up higher when you pull them all the way up. If that is appealing to you, from what I can see, you will need to add a header from which to hang them, so that they will clear the windows when open. That can be masked with molding stained to match. Some blinds have valances of molding available to match. And it also means measuring carefully from side to side, based on the spot at the top where they would hang, because every additional bit of distance out from the window means their width might have to be reduced a bit, so they will clear each other at the inside corners. (Am I making that part clear?) For the safety of your children, whatever treatment you choose, think about how to corral the cords so they can't get tangled in them.

Yes, I custom designed a mock Roman shade for my mother based on a totally function Roman shade that I made for myself (see 4th pic below). She loved the way it looked pulled up, so here are pictures: Not yet installed, still lying on the floor (approx. 16" long): Sorry for the poor lighting where it was installed. It is hanging about 8" higher than the window frame, barely covering the top moulding: Another one for my mother in a different room and different fabric: This was the her inspiration shade which is a fully functional Roman shade covering a window about 65" tall and 29" wide frame to frame: I used Simplicity pattern #9986, but had to adjust for a smaller width and longer length. You could also Google "mock roman shade" to see other styles. It will depend on the ACTUAL shade you choose and then design one to match how it looks pulled up.

Olivia- answering your question-I guess what you had originally is what I like. Navy curtains straight down. Skip the valance, would be great if you got rid of those wood blinds, but I understand if its a no go zone. Can I suggest room darkening curtains, they work well with blocking sunlight in the mornings. I did this in my room, just to avoid the whole blind thing and when I open the curtains the full window is exposed and lets in all the light. Agree with doods- longer rod, fuller curtains ( wider in size ). I have had 2 curtain panels stitched together to make a wider curtain before.. Not too high curtain rod setting either. Maybe a little puddling on floor to give it that romantic feel. Navy curtains I like, nice contrast against the lighter wall. Is that gold ( yellow ) in that artwork? ..so maybe add some gold accent in the room, either in throw blanket or throw pillow. Good luck!