First finad another home for the TV that is too big for that wall . If allof this is being ripped out and a new linear FP electric put in then maybe the TV above that FP. If you do not know what to do with the shelves then IMO you do not need them. I love Besta from Ikea for a wall of TV storage and a bit of display . You can put the pieces together to look custom if he style is a bit too modern play with the pieces and get a caibinet maker to do the layout in a more traditional look .

There are so many directions this could go. You basically don't need to keep anything. Find some inspiration pictures that you like and then do a paint program mock up of your wall with the correct dimensions of your new fireplace, your TV etc. I found the best linear fireplace inspiration pictures were in the ads for the linear fireplaces.

We did a mock up (with correct dimensions) when we put in our electric fireplace and it turned out exactly how we envisioned. Love, love, love the electric fireplace. It is one of my favorite things we have done to the house.

Our fireplace had red marble tile around it and we decided to go with just plain white drywall for a modern minimalist look. We also hung new lights from the directional spot lighting in the ceiling. They make a huge difference to the room. Your ceiling is lower but there may be some smaller lights that can make a difference. If your room is open to the kitchen you would want to make sure they compliment whatever you are doing there.