I can't tell...is the wainscoting wallpaper? I'd remove that from everywhere, I'd remove all the cubbies from the tv area, lower the TV, remove the light above the fireplace and get a fabulous piece of art over the mantel. I think the bookcase is ok if you put a large piece of art above the fireplace...it will dwarf the bookcase visually a bit and it's nice to have a built in bookcase.

I'm usually a fan of accent walls but that is so massive, and especially with all that's going on there, I wouldn't do it. Maybe someone will do some mock ups to try it out for you.

Yes, there is that wainscoting wallpaper EVERYWHERE and its all coming off eventually. Thanks for the idea of removing the built ins around the TV. They are pretty beat up anyway so no great loss.