I think your first idea should work well, but for another thought, what about doing layered WTs with sheers and blockout drapes? Then put holdbacks on either side of each window and when you need air, pull the outer drape back and arrange on the holdback in way to obstruct the brightest part of the street lamp or traffic light, yet still let the breeze come through. This could work well if one vertical half of the window tends to let in more light than the other vertical side. The top-down/bottom-up blinds would work better if you need more horizontal control. The sheers should still be light enough to let in a breeze. Is this more of a seasonal need to get an evening breeze during warm summer nights? In winter, the thicker WTs would also serve as insulation.

Are you in Florida? We do not have wood trim on our windows in Florida, just drywall returns. This is not only to prevent termite infestations, but also our constant sunshine wreaks havoc with wood. I have marble sills. We do have wood trim around all doorways. That being said, I do have two-piece crown molding and large baseboards in my entire home which has 12 foot ceilings. I would keep the look you have now. Move on to other things, such as painting or window dressings. ;-)

Window and door trim, as well as base and ceiling moldings, need to be done properly and proportionately. You will need a good idea of the correct proportions, and a good trim carpenter to install it. It is costly to do correctly, and you may want to research the style that fits your house, as well as the budget to add trim. If you don't have the time and budget to do it well, then forgo the trim and just install outside mounted window treatments, which will cover the area completely.

They of course WILL make them. and what they will not tell you is it is GONNA be a pain in the rear end. Over time, simply the lift and strain on rings and cords, and the heat that builds up with every yank, will "burn out" the cords. Then.......no matter how well crafted? Plan for puff and fluff ritual with every yank back to raised position. You can spend the money and find out. I wouldn't let a client do it at that width. Do as you will. Come back with the regrets: ) The treatment is INAPPROPRIATE for your windows. But yes....... someone will be happy to take your money. The corner will be the least of the issues. Hide an inside mount privacy treatment under a "fixed and never moving " roman shade valance. Or do not do it at all. Ya heard it here.