Everything looks good, but I wouldn't iron with a towel, no. Not enough heat will get through to the fabric and it won't get the wrinkles out. If it's a fragile fabric, you could use a pressing cloth (any thin, semi-sheer cotton works fine), but these batiks aren't fragile. Just iron normally!
When you put it in the dryer, take two pairs of men's athletic socks (the white kind) or whatever you have that's similar, and tie them in knots, or flip them around each other, so they form balls. Toss them in the dryer with the fabric, and they'll bounce around, keeping the fabric loose and tumbling. Otherwise, it will twist up into long ropes that won't dry.
When cutting, remember that you need double the width of the window, if you want it to look gathered. If you just want a straight, flat curtain, you can cut it the exact width, plus a seam allowance (since you're lining it, not hemming it). But for a gathered look, you need twice the width, plus a seam allowance. Add extra to the length for the channel for the curtain rod, and if you want a narrow ruffle at the top (a header), you need to add extra for that, too.
If you're hand sewing the entire thing, make sure you get a comfortable thimble! I hate the metal kind. I use one that's black leather, with a metal circle embedded in the tip, so the end of the needle won't penetrate.