The fireplace is not what is bringing down your room.

I would not paint it.

Remove the mantel and replace with a simple beam.

to modernize, remove the shelves, paint the wall white and remove the floral chair.

I would go with white

or charcoal gray

You could try a wash first…even a light gray layer under a white wash for a little softer look than stark white..if you like that the mantle and wall shelves could be white…if your ceilings are white consider using that color for a smoother flow…

That is a MCM FP and it is not the least bit dated your decor and the TV above the FP are much bigger issues along with the lack of lighting. Post pics of the whole space please . Post here in a comment do not start another post.

The giant image of a motor might not be helping. :)

Patricia is right--it's awesome as is. The mantle is wrong for it, and that might be why it's bugging you. Try something blocky, sort of similar to your shelves.

Also, that's probably sandstone which doesn't like--or deserve--to be painted. You lucked out in that the color is pretty even. Sometimes these have mixed colors which can look excessively retro.

Nothing wrong with your lighting that we can tell from the photo. Natural daylight is nice! I'm sure you turn on lights at night.

don't paint it

I think if you painted the walls the same color of the ceiling it would work really well with the fireplace:

You have a beautiful mid century sandstone fireplace (with a craftsman fire screen). Most fireplaces of that vintage had a solid sandstone mantle. That would look better than anything else, in my estimation. The brick sandstone is the real deal. Don’t screw it up by painting it.