The stuck on wart of a fireplace is what has to go. No cheap plastic pictures of wood on particle board in the house, please.

HI -- Yes I would continue the fireplace to full height getting rid of that niche . And think about engineered wood floors . They will be better than the laminate .

Hi Joy. Congrats on the new home! Yes, I would wall-in the niche, which will likely be a constant problem.

While this seems a natural place for the fireplace, I can't be sure without knowing more about the room.

I took this photo right from your idea book. If a fireplace works in that area and this is what you love, go for it.

The tile does not seem to be your style, but the cost/benefit of replacing it, you will have to make. It certainly is not offensive and is neutral.

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