I watched an HGTV episode recently where they placed several layers of compound right over the brick; sanding and smoothing in between coats until they achieved the desired surface. They then built a surround with mulitple layers of MDF and built up a molding. Inside the surround they laid out a light colored stone... something like a flagstone. On either side they built white open shelving to house home theater equipment. Sounds a little like what you want. Now... I'm a HUGE fan of glass tile but once you do it... you're kind of married to it due to expense. The beauty of this "spackle" treatment... is you can change out the color, making it an accent wall or blend it in with the existing cabinetry giving it a real built in look. The episode was pretty cool because the chiseled out the stone to create a thick deep enough groove into which they laid tubing through which they ran the all the wires for the home theater equipment. So many ideas out there.....

The floors and fireplace are beautiful... congratulations. I'm not feelin' the gold counters since the fireplace is reading soft gray, a little creamish gray, and rose to me. I'd go in one of two opposite directions on this. Either soapstone to tie into the natural more rustic materials or something with a whiteish ground that will work with a slate backsplash. Love the idea of a slate (ie Fire and Ice) backsplash or quartzite BS in there.

In order to ground your furniture and make this high room look cozy and inviting, look for a large area rug that should fill most of the floor space with about 1 to 1 1/2 feet of wood showing at the perimeters. Make it something lively and colorful, in tones of terracotta, green, blue, beige. An Oriental rug would look great and will warm up this room and reduce the impression of height. Put a table lamp on the white table and move the sectional a little bit away from the wall. I would not replace your new drapes, that seems really wasteful. Do get a large coffee table, a square one would probably be best. If worried about children running into it, then perhaps a large square ottoman which has long wooden legs so that it has a more airy look. If you place two chairs at the open side of the couch that should help to stop children from running into the table. Do lower the clock in the dining room and the pictures in the living room, and also the TV. Additional colorful pictures on the wall will create interest at eye level and decrease the feeling of too much height. After you buy the rug choose pillows for the couch and chairs that borrow colors from to create a harmonious whole. I see now that the chandelier in the dining room is also too high. It should be much lower over the dining table. Your drapes are beautiful!

First, that is likely a STONE veneer on the wall. If you don't like it you have to remove it. Or you could paint it. You can also remove part of the stone and add a timber mantel to the FP Here are the steps to get the stone off and the surround installed.