I would recommend that you first adjust the handlbars so that the ends point at the rear wheel axle. Then, most suggest that you adjust the height of the brake levers so that the bottom of the levers is parallel horizontally with the end of the handlebars. Then adjust from there for comfort.

On bikes that I've not had brake hoods for, I've had good luck with wrapping the tops of the brakes with bar tape when wrapping the bars.

Kinda like this: