I'm going to start with the first four bars (measures) of the tune. The way the tune appears in fake books is like this (click on the image to make it bigger):
Since guitar is a transposable instrument (like trumpets and saxes) if we played what is written above then it sounds too low, so the first thing we need to do when making an arrangement for guitar is transpose the melody up an octave. That gives us:
So far we don't have anything that resembles a chord melody, that's the next step. When doing chord melodies you must keep in mind the chord that's supposed to be sounding at the moment the melody is being played. Think of the guitar as being a bass (low end), piano (harmony), and sax (melody) players all in one. That's quite a challenge! So, we want the root (tonic) of the chord on the 5th or 6th string (because they sound the lowest), the melody on the 1st or 2nd string (they sound the highest and best bring out the melody) and the harmony somewhere in the middle. These are guidelines that can change depending on the arrangement or effect desired. Nothing in music is written in stone.
You will soon find out that there are several ways to harmonize bass, chords and melody. I'll do one, which is usually the one I use the most, but that doesn't mean it's the "best" or the "right" way. Farther on down the line I'll go into variations on harmonizations. Do whatever works and sounds best to you.
The above arrangement is made to be played with all 5 fingers of the right hand, in other words without a pick (plectrum). If you're using a pick, then the Bbm7 in the second bar can't be played completely, you'd have to leave out a string in the middle. Don't let this discourage you, experiment, the arrangement will still sound good!