Yes indeed, you are at a stage where that decision must be made. Also, you need to address the hearth design. Is this fireplace going to remain woodburning or do you have other plans for the type of fire you will have?

Heres a picture that looks like it might be what you are trying to accomplish, just based on the framing you have there already. It's funny, it's actually a photo from digitaltrends.com relating to why you DON'T want to mount a television over a fireplace but the article does give very sound advice.

Definitely making it into an accent wall would be your best option - it's great that you have a blank slate to work with and can basically choose any tile or stone that you want. What color is the floor going to be? This could have a dramatic impact on the color you choose for the fire place. Here is a picture of one we did in stone pieces (which is on mesh just like the mosaic tile!)

A stackstone type tile would look nice in this application and it is budget friendly. Another option would be to install a stone surround (which you would have to do either way) and to paint the drywall with a splash of colour.

A picture will actually be going in the top opening and will most likely be anstract. But it is set up for a tv. The flooring is medium brown 5in birch wood flooring. The fireplace is gas and we had the idea of buying fire glass and laying it in the bottom and turning the gas line over for the blue flame. We definitely lean towards a more more modern style, but not ultra sleek. We would like to make it an accent wall considering it is the first thing you will notice when you walk in the front door.The colors of the overall scheme in the home are dark woods with splashes of maroon/ burgundy, creme, and olive green. But nothing has been purchased yet, so we are up to any suggestions. I hope the information helps

And yes we would like a mantel, but one with clean lines