Since really efficient heat is not a priority, you do not need any unit that does that. You did not mention whether you have natural gas that can be piped into your fireplace. If you do, the obvious answer for you is to get a VENTED gas logs unit. Stay away from unvented because they adversely affect indoor air quality and are illegal in some building codes. In my opinion, they should be illegal everywhere. If you haven't done so, you should have a certified chimney sweep clean you chimney and ask him to comment on its condition, to make sure it will work when you use it. If you do not have access to gas, ask the chimney sweep to make recommendations on how to use your fireplace.

Rather than tearing down that wall, consider making a giant cased opening, so that there's still division but a more open feel?? I like the wood beams and the wood ceiling. To make it feel less cabiny, could you sheetrock the wood wall paneling and leave the ceiling alone? That's what I would do. Sheetrocking the walls will make it feel less woody. Apply a nice wall color. Oh, but then you have the issue with the sheetrock not lining up with the ceilings, right?? Put built ins on both sides of the TV. You'll have to take down the hearth where you put the built-ins One purposed for the TV, the other for accessories and books. This will not be too many focal points. Many homes have their fireplace in the middle flanked by builtins on either side. a corner built in would be fine as well, but then you have to continue the rocks to the ceiling. with the book ins on both sides, you'll remove the rocks from the wall. Get rid of the green carpet, of course. Yes to continuing the wood floors into the den. That is a MUST in my opinion. here's an example of a giant cased opening separating formal dining from the den. it provides separation of the spaces, but doesn't close you in as a wall would. http://i143.photobucket.com/albums/r148/bmh4796/IMG_1435_zps2d1648a4.jpg this is looking into the den from the dining room through the cased opening http://i143.photobucket.com/albums/r148/bmh4796/IMG_1399_zps331becb8.jpg here's a few houses with wood ceilings but sheetrocked walls. they look great! not cabiny at all. check them out http://agreatbigcanvas.blogspot.com/2010/10/wood-ceilings.html http://ionfashion.net/wp-content/uploads/2012/12/1a4c6__natural+light+wood+ceiling+beams.jpg this room really reminds me of your layout. interesting what they did with it http://www.oldvillagemasterpainters.com/images/Kill/K5.jpg

You might get more advice on decor in the decor forum...

The tv looks to high to me. It should be lower. It is lower on your inspiration picture, but, your inspiration picture has a longer lower opening and is either gas or electric. Yours appears to be wood burning. You can build in the sides, and have it all look similar, but, find a new place for the tv and just have a nice pretty picture where you now have the tv.