I believe the bottom boxes were made for wood and i suspect the fireplace surround is an add on. If you do not wish to store wood underneath i would add small lights, then put large statuary or glass/crystal in there, top you may wish paintings, buty i would say same them on both sides. left side more art. up the center you may wish a thin mirror if there is something to reflect otherwise more art, but i would make them thematic or coordinated in some way.

above all aqua, make a statement, small enough for chimney, below all rimmed in white matting. Unreal animals running up would be cool too.
shelves added, but not just straight, not filled with many small things made make a statement.

Interesting problem for sure. Are you thinking of doing construction, as in covering up the holes? Or strictly decorations?

You could put wallpaper, paint a bold color, or have a mirror slab cut to fit on the back wall of each upper cutout, then install a couple floating shelves for books, candles, etc... on the bottom you could do the same minus the shelves and instead put a large vase or sculpture in those cutouts. For the upper center part, if you go with wallpaper or a bold paint color for the cutouts, find an art print or clock that matches.

I love Beverly's idea. Larger statement pieces are so much better than shelves full of smaller items that don't stand out. You can also paint the brass on the fire screen with a black heat proof paint to make it a bit more modern. It's a space that could be really beautiful if done correctly.

kat your msg on my email came out...you can also paint the bras... tehehe

Love BeverlyFLADeziner's idea. If you fake the log stacks, you'll still have storage space behind (for kids toys etc) whilst above I also agree that you need to make a statement with some larger objets d'art - pieces of art or sculpture.

What about adding a glass shelf on each side on the top to keep it modern, yet opened as in the picture below? Like Beverly's idea for the bottom nooks.

Wallpaper or a metallic finish on top shelves would create drama.

These are such fabulous ideas. Thanks!

Wondering what y'all think about the tile around the fireplace. It's yet another tone of cream, which the house is covered in. Wondering if we can tile over that. If yes, what are some of your ideas. Or if there are other solutions, shoot! thanks!

I was thinking that covering the lower openings and then tiling over them would be another option as in the picture I posted a few comments above. Do you have a good contractor and tile guy you could ask? If you don't want those openings, I say close them in...I do like the top ones opened, though, and think glass shelves would make them look finished.

I like the idea of keeping the lower openings for storage for our daughter's toys. We don't have a tile person or contractor at this point.

You can make structural changes like framing up the openings or adding contemporary style cabinet doors. If you don't want to go that far I would suggest painting the rear of each compartment a with a paint that is a few shades darker than the surrounding wall color to give those areas some depth. Perhaps doors on the lower openings to create additional storage and using the upper compartments for displaying artwork.

Those would make great storage-and with a little one you can never get enough of that! I would keep the doors contemporary to match the style of the fireplace. You can tile over the existing if there's enough room to do it without coming forward of the stucco. If it's a gas fireplace, it might not be possible because your insert is fit into the existing space. A store that sells fireplaces would be able to give you the best advice in that regard. Personally I don't mind the cream as the monochromatic colors keep it contemporary and clean looking.