They may not be the style of curtain you would like for the windows, but eyelet curtains can be drawn back to a very small space and will probably only cover the far left and far right window frames - so the glass will be fully exposed.

As per your photo the curtains should be hung on the outside wall with the black rod, this will also make the window appear wider. Thinking the rod should be just above the picture rail and below the cornice.

There's been a pelmet removed from the window, Paint window frames white and add new white roller or Roman blinds, you won't even need to pull the curtains across if the blinds are well done, but would make the room feel cozy in winter to do so. Your house has lovely period features

I like the black rod as shown in the 2nd photo and the appearance of curtain contained within the alcove. Agree with siriuskey about placement of rod, above picture rail & below cornice. Kristen, have you looked at your local suppliers to see what options they have?

I love and see the second photo as the curtains hung outside the alcove with just the one wide roman blind across both windows to match the curtain,

Thanks everyone! It seems to be 50/50 so far for hanging the curtain inside the alcove vs on the outside wall - any more photos or guidance would be very welcome! Great idea to install a single roman blind across both windows, as well as the curtains.

Kirsten I would also hang the blind at the same height as the curtain which is just below the cornice and in matching fabric, this allows for the blind to be pulled up to and just onto the windows and will allow the full window height for light into the room

I agree with using a pelmet replacing the one that was across the windows with a wider one on the outer wall so that the curtains still pull back to the edge of the alcove, painted to the wall colour or padded with the same material as the blind and curtains. I know you love the black rod for the Hamptons look but this will still give a beautiful built in lux appearance

another idea if you had a plain pelmet that was within the alcove that came from the bottom of the picture rail to the top of the window and flush with the walls on both sides painted the same as the wall colour., you could then run your black curtain rod across the alcove pelmet which would look like the wall. When I had my Ferderation House we painted the bedroom walls up to and including the picture rail in the same colour. The wall above the picture rail and the ceiling were painted flat white, along with skirting boards, an old painter told me about this and it looks brilliant. A couple more photo's for you with different looks