I would just paint the wood you have the same color as the rest of your walls. Horizontal (shiplap) paneling won’t really complement the architecture of your home or the furnishings.

I agree, paint, and get thicker wood mantle. You can change it later, but I’d try that 1st. Nice room!

Thank you. Unfortunately the windows need repair and the wood around them need to be taken off and can’t be reinstalled. Two companies have come in and said they can’t put the wood back as is.

Post photos of the whole room so we can provide contextual advice. Horizontal ship lap (if that’s what you are referring to ) is basically passé and doesn’t seem to match your home or decor. Maybe just smooth drywall would be best? I’ve never needed to replace the walls when replacing windows- trim maybe. Maybe I’m not understanding.

If you can go light I think it would really soften the space. I am not someone who likes a mix of patterns. I am simple lady. I personally do not like a bright orange red Brick pattern mixed with a wood pattern. I like one or the other. But if you are going to mix think light. Unless your style is Mid-Mod and then I am sure you can find some ideas on houzz. Here are a few that look nice but maybe Shiplap is out.

Panther Ridge Custom Home · More Info

Modern Farmhouse · More Info

Whitelawn Residence · More Info

Wicksburg, AL · More Info

Laurel Home

Burlap and Blue blog

FAMILY ROOM · More Info

Fox Country Farmhouse · More Info

If the wood can't be put back consider just having drywall instead.

The new material next to the brick that appears to have some issues that need to be address, is going to make the brick look even worse. Consider everything at the same time.

Perhaps if you painted the existing wood panelling it might make it possible to make repairs when replacing your windows. The panel style you presently have seems to coordinate well with your style, I don't think horizontal would give you the same effect.

Referring to BeverlyFLADeziner last photo just above, the painted panelling and brick would look very nice with your decor in a warm white: