I would consider base cabinets next to the FP in a wood that's the same species/finish as your ceiling, then add open floating shelves above. The mantel could be a very simple wooden beam with a matching finish. The simpler, the better. See this inspiration photo, below:

I don't have any suggestion but that ceiling is Banging ! :)

I wouldn't take the pony wall up to the ceiling. With the FP at an angle it will make the chimney feel crammed in. But you could straighten the pony wall at the end, instead of having it slope with the stairs. I think visually it would work better.

Call me crazy, but I would leave the mantel but add wooden shelves or a very wide credenza in the same finish to the left with floating shelves over it

Add a wide rustic wooden horizontal mirror or art above the mantel.

Also consider changing out your rug to golds, blues, and reddish brown. Your current rug doesn't bring much to a beautiful room.

I too thought of a rain and banister where the pony wall is....will open up the room and I think would look nice.

Leave the pony wall and perhaps get a beautiful wood-framed horizonal mirror for over the sofa instead of the driftwood (though it's great). Then you'd have the water view on that wall.

Here are some floating shelf/fireplace/tall ceiling photos for inspiration:

I'd do away with a mantle altogether. There's a lot going on in this room. Maybe use the mantel as a shelf, with a pair of ottomans pushed under it.

I like the idea of replacing the pony wall with rails. The wall behind it, with the doorway and paintings, is half obscured. Partim's idea of remaking the mantle into a shelf is also a good idea.

One of the photos shows stairs length-wise, and how a bit odd that fireplace is so massive, but drops off to nothing at the hallway.

Still think if a pro designed it - maybe keep the current slant and frame it to at least the top of that door down the hall.....