I suggest posting this in the remodeling forum.

5 1/4" is big for what could be done, such as putting a break or two in the moulding so it "returns" to the wall before reaching the opening(s). But there's are aesthetic concerns with doing that, too.

I suppose you could also consider running it over the opening and finishing the hallway side somehow, but that seems like it would be kind of odd, too.

..or you modify that hallway 1/2 arch to look like either a beam or a full arch that's low enough for the crown.

@Homebound - great suggestion on cross-posting in the Remodeling forum. I will do that.

I agree that 5-1/4" is too big due to the limited space between the ceiling and top of arch. The carpenter thought that something smaller would work over the arch.

Your comment about putting in a break to make it return to the wall before reaching the opening sparked some thoughts, and I'm going to explore it... Not sure how it would look, although I'm going to do search for inspiration pictures on houzz.

As a fyi - I've attached another picture that shows another view of that ceiling-wall intersection.

Thanks again!

There are two obstacles;
first that the horizontal run of crown cannot be simply mitered into the raking (sloped) run of crown. That's a problem with one or two solutions, both of which have disadvantages.
Secondly, there is really very little room above the arch or at the corners for the crown. Having the crown cut across the openings to the side hall(s) would look dippy. Solution for that would be to drop a header across the hallway, which would make it look nicer (IMO) even if you didn't use crown.
Casey