I agree with painting the wood frame. I like the brass though and the the brass accessories. Art, sconces, photos, and large indoor plants or small indoor trees would all be great options for the space.

Actually the fireplace isn't bad, have you thought about painting the wall? If you start with the wall and make this a focal point with a large piece of artwork and maybe put some built ins on each side, this would actually be a nice space. Then you could decide what to do with the fireplace. Removing the wood surround and keeping the brass and ceramic would give a really nice look as well. The floor is beautiful too. Start small and simple, don't do anything big, manage the surrounding area then do the main point, the FP after that.

If it's within your budget, bookcases flanking the fireplace would be nice and cozy!