This may seem counter intuitive, but I think a dark toned wood would help ground the space and make the existing wood seem lighter. Other than that tile would be the way to go.

I hate carpet...maybe take Susan's advice and get a light fun area rug?

The orange wood doesn't bother you? Paint it all white. You'll still keep the texture of the panels. Install a wood floor.

Replace the ceiling fan with a large chandelier and get rid of that torchiere which has a terrible quality of light for this room. Any chance you can change out the furnishings too?

I would update the stone fireplace by carefully applying a softening stain to the stone.

Or add mortar to the space between the stones to update the appearance of the stone.

Here is a room where half the paneling is painted.

By "lighter" do you mean literally letting more outside light come in OR metaphorically "lightening up" the look of the interior, making it more airy looking?

Is there a reason why you can't think of more wood for the flooring and then add a nice rug?

You can put any kind of rug on top of a carpet. Many people don't think to do that, but if you like orientals, there's no need to tear out the neutral wall-to-wall. You could get something really lush that would transform this space without having to shell out for wood flooring.

BTW if you live in a cold climate, the carpet will be a lot warmer than wood! Great for your feet, great for your heat bill.