@sozobe,
Our master bath at home used to have a wooden window etc above the bath too. It started higher than yours (3ft 7in above the tub) but we had some of the same problems.
I used a vinyl mini blind, cut to fit, but found it horrible to keep clean, what with water spots, calcium, etc. I can’t image that a roll up one would be much better unless it were bone dry each and every time you rolled it up out of the way...
I can’t tell if that’s dry wall above the tub surround. If it is, I
might just place a curtain rod above that, especially if I could raise the tub curtain bar to the same height, or slightly higher (I don’t know, I’d have to fiddle).