I would keep it neutral. The fireplace is already interesting with the stone and shiplap, trying to add more elements to that wall (there's already windows and curtains there too) just makes it look busy. Keep the wall simple, let the fireplace be the star.

The wallpaper is too busy but I like the navy blue paint. It gives the wall depth and advances the prominence of the fireplace. Lovely room.

I agree the paint is a much better choice but I am not sure where the blue fits in the space ,except for one random blue pillow.

Match the rest of the walls, and fill each side with full drapes 21/2 times fullness) going floor to ceiling. Lower TV so bottom is only a couple of inches above the console - your neck will thank you.

If you’re not going to change the chairs, I wouldn’t paint the walls blue. Too many clashing colors. A nice neutral color won’t compete with the fireplace. I would also remove the colored accessories from the fireplace. Too much stuff on there. Leave the large candle sticks and balance.

Paint it neutral, matching other walls. Cute dog!

Thanks all!

Remove the wallpaper. Remove the clutter on the mantel and other surfaces. If you want some blue in this room, try blue drapes. Personally, I think the fireplace looks good in a neutral setting.
That wallpaper may make a good accent wall in a powder room.