I don't see any big crisis here. If you have a sculpture, vase, or other piece to put up there, then do. If not, then you could lean a painting or drywall over the gap (maybe with a secret compartment behind the art!). TV to the left should make it easy to arrange furniture around the fireplace and TV at the same time. I'd paint any remaining exposed outlet covers the color of your wall, to de-emphasize them...

I like a fireplace that goes to the ceiling. I think they have a lot more impact. I would call a carpenter and have them frame all of that in and continue the nice woodwork.

I think both previous suggestions sound great, why not do them both. Have a carpenter frame in the top of the fireplace with some hidden storage behind a large piece of art. Best of both worlds.