Can you get another slab of the same countertop? I think that would look great.
Otherwise keep it simple with the tile.

Thank you. Any thoughts on what tile to choose?

Are you planning on replacing the carpet to a cooler color too? If not, make sure to choose a stone or tile that blends warm and cool. A little beige, a little grey, a little cream.

With everything going on in the room, consider removing the mantel and taking the stone all the way up.

(also consider moving the TV over the dresser to the left, as it will be at a better height and allow you to showcase one piece of art that you really like)

We were trying to limit the expenses so I don't think we would extend fireplace up. Also the builder carved out the tv in drywall so that would take repairing to move.

Any thoughts on a tile that balances warm and cool?

I actually think that fireplace is beautiful and would leave as is. It seems to maybe bridge between the warm and cool colors.

If you are trying to limit expenses, I'd keep the fireplace as-is, as I like the current color with your color scheme. Instead, move the tv over the cabinet, and then place a great piece of artwork over the fireplace (hiding the cut-in for the tv). You'll have a calmer space as the fireplace will be the star (rather than having a competition between your cabinet/artwork and the fireplace), you will have a better balance between light and dark in the room, and you'll still have good tv viewing. Also switch out the cabinet hardware for something in matte black, change your coffee table to something round that complements your side table, and think about adding blinds with roman shades instead of curtains and the slat blinds that you currently have installed. You'll save $$ and have a better balance in the room, still achieving your goal of timeless vs. trendy.

We re-tiled our fireplace last year. We selected a multi-colored tile that looks like brick. Our family room has light grey walls and ceiling and a grey finished concrete floor.

Just limewash the stone.

IMO your room could use a larger TV. Place art above the FP instead.

Great suggestions by everyone. Thank you for the picture, that's so helpful! Moving the TV and covering that hole with artwork should be an inexpensive fix. However, I still don't like the brown stone it still draws my eye. Any ideas on a replacement tile?

Rambio limewash from Home Depot is great!! They also have a flat masonry line made just for brick and stone! Would look beautiful in there

Try limewashing before removing the stone ...