This is a no-brainer, open up the room by removing the fireplace and as much of the wall as is structurally feasible.

Re: resale value ... I would not NOT buy your home if that fireplace was missing, but I might pass on your home with it the way it is. Hope that makes sense!

I would remove the fireplace for your family's safety sake. I don't know a lot about leaky chimney's [never heard of it in fact], but I would be concerned about carbon monoxide poisoning.

Yes, remove it! Show us your "Before & After" pix!

Remove it. Chimneys can be a headache. Also, if the fireplace doesn't work properly, there is no need to keep it.

I have a phrase I like to use with my clients when they are facing a challenge to spend and/or not to spend "is the juice, worth the squeeze?" In understanding that you use the fireplace only two times, more for ambiance then for a source of heat, and in understanding the trend in home design of creating "great rooms" - opening up kitchens, dining rooms and living rooms into one large "gathering" room - I might suggest - remove the fireplace.

Now - the other information missing is "where do you live?" Fireplaces are an important item for resale in certain communities, the mountains as an example However - if at all you feel you want a fireplace element there are many options out there such as freestanding gas and/or wood stoves that get installed against a wall with the chase exiting from the exterior wall or up through the ceiling - depending on the layout of your home.

AND on another note: I always encourage my clients to focus spending $ on themselves, NOT on "that person who you don't know that will eventually buy your home in the future!"

Good luck on your project and have a great new year.