Curtains for old 1932 house

I know little about what types of curtains we should install on our windows in our 1932 Dutch Colonial House. We want semi shear curtains and draperies outside those as well as window pull shades. How and where on the window does one hang the sheer curtains? On the window itself? Inside the window frame? Do the draperies get hung within 4" above the outside of the frame and on either side of the window (to about 4" from each side)? Also, what length should the draperies be. I am hoping to get curtain rods for the draperies.

Sue