The frame looks to be a custom aluminum job, with gaps that used to have felt or something between various structures.
My question is this: is it ok to fill the gaps with caulk? I'm wondering why they originally used felt not caulk -- maybe because its like 60 years old??
What kind should I use? I have some silicon stuff that is white but dries clear. Is this ok? I have no idea... I don't want to damage the aluminum.
A long time ago, caulking wasn't available like it is now. Also, gaps were good for long runs of wood siding, to allow for seasonal expansion and contraction. This is why most caulking for siding and windows is flexible, it can usually handle the stretching and compressing as wood changes with the seasons.
A long time ago, houses weren't sealed up as is the fashion now, but breathed. So if you start sealing it up, be sure your bath and kitchen fans are good enough to provide good exhaust, and also that you have a source for fresh air intake, which will help the exhaust fans work.
I would avoid silicone for interior and exterior places in general, though it is good for plumbing applications like sink strainers. Silicone will resist acrylic paint, and is difficult to clean off when you want to paint. Silicone caulk is also usually RTV meaning, room temperature vulcanizing, so it dries/cures at room temperature. To accomplish this it often contains acetic acid, which will attack the aluminum and cause corrosion.
So I would recommend acrylic or polyurethane. Polyurethane is really great, and is flexible, and paintable, but harder to clean and tool than acrylic. For polyurethane, I try to apply it in a way to not require tooling.