Wow such a change already, good job.

I think a white surround with wood mantel would work well. Having the TV to the right would work too. Put a low console under it. As for the size of the sofa it's hard to say, tape it out to see how much space you have.

If you really wanted to make a statement with the fireplace you could take it up to the ceiling.

Thanks everyone! Im going to start with something like these, this week. o'll share my updates after!

I agree with taking the fireplace statement up to the ceiling. Embrace the uncentered quality of it and instead make the fireplace and the fact that it goes all the way up to the ceiling as the focal point. Measure from the mantle to the highest point of the ceiling. Get a tall piece of wall decor. Find from local artist, art gallery, or art.com. You can also put a texture there, such as stone or other material. At its simplest, you can just paint it the same color as the fireplace from the mantle to the ceiling, in a straight column up.

I think you can do a lot with this. I would not cut this in half by having a traditional tile surround and mantel. I would take the tile, or wood all the way to the ceiling. Bump it
out a bit so that it is not flush with the right of
the wall. I probably would not hang anything over it. This would be my statement piece for the room. This are not the actual style I would suggest, but more of the concept.

Honestly, though some of the suggested fireplace fixes are gorgeous, that off centered, afterthought of a fireplace isn't worth the expense and hassle. Use the budget for art and beautiful built-ins that extend the wall sideways and provide function for you. Keep the fireplace side simple.

I would have builtins made to incorporate the fireplace and the TV area all the way to the right. By making one connected space it will make the offset fireplace less obvious and more of a choice.

How big is your TV? That will be a consideration with sofa placement for best viewing.

50" tv in the living room, but I have a 42" that I can put in there instead

Changing the flooring and paint is a total transformation already. It looks great. You definitely need the larger tv or the seating will be too far away. Sounds great to add the tv next to the fireplace to balance the space. I like the 2 photos calidesign posted going to the ceiling is an option but a lot more work.