“Patents were always intended for protection of physical creations or the arts.”
Wrong. Patents were to protect ideas. Software is an idea.
No, “idea” is way too broad. Patents were to protect “any useful art, manufacture, engine, machine, or device, or any improvement thereon not before known or used.”
That’s the wording used in the Patent Act of 1790. A useful art means what we today call technology. It did not mean “art” as the term is commonly used today to describe things like “Piss Christ”, and performance art, like 1911’s jeune fille Adorée Villany’s did. Nor did it include Micheal Jackson in either his Jackson 5 or his Thriller persona.