I wonder what it would look like if you eliminated the fireplace alcove and continued the tile all the way to the ceiling?

Close up that opening above it and take the tile up to the ceiling like Sue suggested. That opening is too deep and narrow to really hold anything anyways.

If this were my project, I would re-design this wall. For the tiles not to look "pasted" on as you say, you should create depth to the stone/ceramic treatment by at least filling the entire plane (without leaving drywall sides) and wrapping the tile into the shelving alcoves. This requires re-design of the shelving and open alcoves to accomplish a sense to the order of the wall to include the fireplace and surrounding treatment as the focal point. This is an architectural problem that I advise you consult with a professional designer to solve.

We had this design in our old house. Over there, it looked different. This time we tried to replicate this design. But it did not trun out the way I expected

PS I am not planning to have TV in alcove.
I like the idea of adding shelve. Would be nice if I can get it adjustable

The current cutouts are disproportionate to the fireplace though.

See how in your old one the cutout was a horizontal rectangle, mimicking the shape of the fireplace? In the new one, you have a square fireplace, but a vertical rectangle. They don't look good together.

That just not the place to be displaying lots of items.

Maybe something sculptural in the niche would complement the marble.

Before reading the comments, my thought was to close in the alcove, and run the tile up to the ceiling.

Beverly has done a great job of mocking it up, above. Looks great, and simplifies the overall look.

That was the original plan to put a large center piece /decor tp compliment tiles.
thank you! if is looking beautiful the way you portrayed it.
I am thinking to add some wood trim around fireplace or a piece of wood on top ( something similar to these pictures)
i am hoping this will be easy on pocket too

or something like this..

How about closing it up as the others suggested with the same tile and the same width but make it a door to open so that shelves can be on the inside to store stuff. Blankets, books, games, I’m sure you’ll find something. If that can’t be accomplished due to the weight of the tiles, how about faux finishing the door to match the tiles?

I would put a wall art with recessed lights, may be some decor from sides.

there will be 2 recessed lights

i like the ideas you all are sharing, to cover the entire place following the same width with tiles. but the problem is we are not the fan of tiles/ stones all the way up on the fireplace wall. we rejected several houses just on that feature.

I wouldn't bother adding wood to this.

I would not even cudgel your brain over covering. It looks absolutely good with wall decor plus recessed lights.

I presume that big open space is for a tv. If not , an anole terrarium is what I'd put there; the whole height of it. Anoles are pretty cheap if you get the feeder pack meant for snakes. There's also the Crayola digital light designer:Setting that in the inlet there with occasional mastic'd mirror tiles would be like an inside out discoball. Okay. as far as your fireplace, I gave you an assymetrical mantle, a couple accent tiles and custom accent paint. On the right , the paint stripe might have to take a diagonal on the side of the fireplace to matchup with the shelving but from the front it should look like a solid line. The only custom work is an assymetrical mantle and finding two different pieces that match level when in place. If you were going to hang art ,find a small piece for upper right column. Whazzzap! y/n

The shelves on the sides are distracting. I would not do more than 3 on each side.

I think you are right about the wood around the marble - hopefully you can remove some of the shelves....it looks like it should only have 1 shelf. The area above the shelf may need a door...it seems awkward....