I wouldn't do either. With the room being long it lends itself to 2 seating areas 0r one large on. in either case the nook is off center and a corner fireplace limits seating and also demands to be a focal point. I would actually believe it or not remove the nook. Decide what will be the layout of the furniture before you make any decision.is this a tv room or a sitting room?

The nook is awkward. If you bury a flat screen into it, people won't be able to see it at an angle. From what I can see- that is your only TV wall? If it is, I might close up the nook. That way you could put two chairs on either side of bay window for a reading area and put TV anywhere on long stretch of wall you want. If you want to keep nook, how about cabinets along the base which a flat screen could rest on and 'sit' forward instead of on wall?

Split the room in 2. Put long floor to ceiling curtains that go corner to corner on the entire wall that has the bay window, leaving them open so you can see outside of course. In the corner where you had planned to put the fireplace place your television (in front of the curtains). Place your sofa facing the TV with a small coffee table in front. For the back half of the room which has the french doors, use pretty formal living room chairs, arrange them so they face out the back of your house, perhaps having one in the corner by the door. In the alcove place a desk with shelving that's 1/2 as deep as the alcove above the desk. This way the back 1/2 of your living room becomes a cozy "get together" kind of room where one can read a book, while someone else goes over their mail, or uses the computer. The front half is basically a TV viewing area.

The flat screen won't be buried. It will be flush. My son just purchased the house and the nook was there. Basically just using it for some cabinetry below.

that will be weird. If you like the nook, make that the back half of the room and a sitting space with book shelves. then put the tv over the fireplace and the entrance end.