This study presents a comprehensive and systematic investigation of the deposition and patterning of hydrogenated amorphous silicon carbide (a-SiC:H) using advanced plasma-based techniques to precisely tailor its optical characteristics for micro-optical applications. We demonstrate the ability to adjust the refractive index, deposition rate, and bandgap of a-SiC:H thin films utilizing chemical vapor deposition. Optimizations are accomplished based on the response surface methodology from the statistical design of experiment. Furthermore, we provide a detailed investigation of the reactive ion etching of a-SiC:H, also guided by response surface methodology. This approach enables fine-tuned patterning of a-SiC:H, resulting in tunable sidewall angles, defect-free etch profiles, and high etch rates. Finally, we conduct FEM and RCWA simulations using the measured dispersion properties for the design of diffraction gratings. Comparisons between the simulations and the measured diffraction efficiencies confirm the performance and reliability of the fabricated a-SiC:H-based optical elements. This study highlights the potential of a-SiC:H for advanced micro-optical applications, particularly in scenarios where high refractive index materials are useful.