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First of all 1200GB, might be enough since you probably are not using all the blocks in the 1.4 TB and will compress you will also lose less.
Can i take tablespace level backups..?
Yes but the value is limited. You cannot for example recover a dropped tablespace.
Test a backup first and get an idea of how much space you really need.
Also once you have a backup how do you free space for the next backup?
You could use the FORMAT command to backup the database to one location and the Archive to the other. 200 GB is not much space.
RMAN backup into more than one location :