What is the style of your interior?

Maybe a candle sconce on the walls next to the fireplace. Something along this line.

5 Wide Merano Wall Sconce · More Info

I’d put a black framed mirror on that shelf that covers up the small hole. Then I’d look at sconces. Really cool house from what I can see.

Style is traditional CA bungalow with decor simple Scandanavian style

Are you wanting them merely as a decorative element or as practical lighting?

If you are going for minimal scandi looking sconces, I think they will get dwarfed by the oversized fireplace might get lost or look out of scale.

The brick protrudes so far from the wall that I think the light cast would be limited and shadows will be created by the chimney. If you are looking for them as a light source, can you show us the whole room plan, if there is overhead lighting, and where outlets exist for other lamps. I presume there are other wall locations that could provide better sconce lighting either for reading or for general illumination.

Not sure on the sconce idea but perhaps consider a nice scandi style floor lamp on one side. Good luck with the Reno!

Thanks for all the comments. Was thinking about for decorating but agree the scale would be off. Hadn’t considered that.

Have you thought about what you're going to do for window treatments? Sconces might not work. I'm stumped by the niche. I don't know what you're supposed to do with that except put a saint inside the niche.