You can have a carpenter build shallow cabinets while keeping the mantle. Perhaps just build closed storage to countertop height, and use the area above for artwork. If you want full floor-to-ceiling builtins, have the fireplace surround removed so you can incorporate the fireplace into the shelving design. You might also consider using two matching storage units on each side of the fireplace rather than builtins. It depends on what you are trying to accomplish. If you want full wall builtins, consider moving the TV to one side of the fireplace, which is a better viewing height.

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Not sure I understand the problem. Your cabinetmaker will put the appropriate "spacers" on either side of the mantel that will bridge the gap. See examples, below:

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That’s the problem.. we don’t have a cabinet maker. We are planning on doing it ourself. I’m just having a hard time with the built ins looking more like bookcases, since we don’t have a wall bringing the fireplace out.

Something like this.. but not sure how to make it work with my situation.

Don't do this yourself. Not unless you or your husband are accomplished woodworkers.

What you could do instead is simply buy two nice console tables to put on either side, then hang floating shelves above.

When you place a TV over the mantel, then nothing gets placed on the mantel except stockings at the holidays.

I would simply place cabinets on either side of the fireplace.

I don’t remember asking what I should do with my decorations on my mantle... but thanks anyway?

Pretty room! Have you searched yet, things like ‘diy fireplace built-ins’ ? I did a quick one, and so many blogs, etc with step-by-step tutorials came up. For instance:

https://mysweetlilac.com/adding-built-ins-fireplace/

https://www.honeybearlane.com/2017/10/built-ins-around-the-fireplace-part-1.html

Too many came up to list here! Many were similar to yours in that the fireplace is flush with the wall.

Even if you don’t see one exactly like yours, maybe some of them will give you ideas and inspiration, especially in how to integrate it all. Good luck!

ETA: Was just reading another thread here, scroll down to Beth H’s posts ... similar ideas: https://www.gardenweb.com/discussions/5885356/help-we-are-struggling-with-our-living-room-space#n=31

Sorry to hijack your post, but where did you get your chairs in your living room?

Yes those arm chairs - where can I get them? And how is the quality and comfort?