Have you talked to a professional mason or tile firm about taking the stone out to replace it with something you like?

Love the stone. Yes you can paint the surround. Just use the heat resistant spray paint they use for grills. If you are going to get a new surround, I would advise getting one with the glass doors and the screen.

I was in your shoes at one time with a similar dilemma. I painted the stone with a medium shade of grey flat paint and it was a nice fix. Especially if you plan to rip it out one day when you have the funds to revamp it the way you want.

Take out the wood posts and mantel and put a heftier mantel in its place. To update the paint, I would go with a light gray color.