I agree with snookums-get rid of the raised hearth. That might help. Why on earth would a builder do that? Sheesh. We have a center fireplace (chimney is in center of house and not on a wall) and the firebox is not centered in the brick chimney either on the main floor or downstairs. It makes me nuts. I just don't get it. you could also camouflage it some by eliminating that mantle, adding a box in the wall for wood and putting up a mantle above both that is just a shelf type without the side supports.

I like the Instagram picture. If you're going to go asymmetrical, it has to be way off center so it looks like a design feature, not an accident. I like the look of the stone (I'm assuming you plan to remove the small brick surround you have currently). I think going floor to ceiling would actually add some visual height to the room which would be nice. If you're unsure, you could try painting the wall (and the brick surround, if its definitely going away) to emulate where you want to put stone. It would help you get the feel for what it would look like. This would let you play with proportion as well, to figure out how wide you want to go. (I think i would go more narrow that it is tall. I like the proportions you mocked up in scrap wood.)

I just notice the roof structure in the house is different to what’s in garage. Was not able to take photo to show it clearly, but it looks like this. Is this a truss which I cannot have one section altered? Can tray ceiling be done in a way to lift the ceiling a bit instead of dropping down?

First thought is to demo the interior brick, mantel and hearth and start with a blank slate. You can then shrink the width of the fireplace facing and make it look however you want to work with the rest of your decor. To save money, you can do the demo work yourself. Those bricks will probably just pop off with a chisel and small sledge hammer. Also, I would pull out that electric fireplace, it's not made to go inside an existing fireplace. The electric fireplace was made to be a stand-alone appliance sitting in front of a wall. It looks odd inside an actual fireplace opening. Do you know if the fireplace is functional? Did it get inspected prior to buying the home? Can you burn wood in it? Does it have a gas line in it? This knowledge will help us offer further advice.