Stone products are typical non-flammable material for the hearth. Your mason should be able to advise you on approved products. Stopping the stone at the mantle does not look bad. The finish above the mantle is a matter of taste. One look I like is sheetrock with a thick finish coat of joint compound spread to random thickness. It's a look I've seen in mexican and southwestern style restaurants and goes very well with stone or wood. Painting is a little more of a challenge. Of course, this look depends on compatibility with the surrounding decor.

I built a surround, mantel and overmantel using MDF, various moldings and honed travertine tiles (filled). I don't know how to post pictures, but, if you e-mail me I'd be glad to send you some. To answer your questions: You can install the travertine directly on the drywall using fortified thinset (don't buy the pre-mixed kind). Just make sure the drywall is well anchored, I drove some extra drywall screws into the studs before installing the travertine. I didn't seal my tiles, but, the honed finish is smoother than what you have. The reason to seal before grouting is that the sealant acts as a grout release and makes it easier to clean the grout from the tiles. With rough tiles I've found it helps to keep a water spray bottle handy which you can use to flush out any grout that gets in the holes before it sets. 1/8" spacing is good, however, if your tiles have rough edges you may have to go to 3/16". On the hearth you need plywood for strength and then you should put down some wonderboard or hardiboard. This is because code usually requires at least 1" of non-combustible material on the hearth (check your local code to be sure what the requirement is). You meet the requirement by calculating the thickness of your tile plus the thickness of the thinset (1/8' - 1/4") plus the thickness of the cement board. You should err on the high side. Hearths can get pretty hot, so the thicker the non-combustible layer the better (it acts like an insulator). Also remember to check your local code on the required clearances from the firebox opnening to the mantel and surround. In most jurisdictions this is 12" (for non-combustible materials). I used some corbels that are closer but I bought some made out of molded stone that are non-combustible.

Here's a few more ideas and thoughts. Since you have a deck on the other side of the house (in 3rd photo) and generous land around you, I'm guessing this is not your main entertainment area. I agree with Yardvaark about the plantings. IN the quick sketch attached, I just cut away some of the excessive concrete and extended the bed, but (hopefully) left room to back the car into (or for the table in chairs if they need to remain). Also added a columnar evergreen on the corner to soften it. For the deck, I change the railings to metals railings for a lighter look for the deck, added screening below the deck, and added a color to the front door. The planters are larger and more of them to fill the corner. For the bare wall, there is a lot of art that is made for the outdoors these days. Pick something you love to use as a focal point. You can also add vertical house numbers, like comelyhomely suggested next to the door. Good luck with your project!

GardenGnome, do I hear you! My wood stove had a natural rough grey brick surround and floor, with chunky concrete, nothing smooth like I think should be for a home's interior. Yours is much nicer but definitely outdated. FIRST - I asked my stove people. Where I live there are tons of wood stoves and I called and talked to them about it. They said as long as clearances are maintained, paint it with what I want, no special paint required. I went with an off-white creamy color for the brick surround and a grey-blue for the wall. I have no wood accents so I painted the mantle a darker blue in the same range. I had no problem this winter. I agree with the above to remove all but one distinctive art piece. I use my mantle to store small stone sculptures, pretty glass vases and some large conch shells I brought home from vacation years ago. I'd paint everything else then decide about the child protection gate around the stove. Before and after: