You need an apartment size sectional placed with the front towards the fireplace were you can walk behind it it were the new wall will be,have you tried adding more insulation? Rather than give up space? ,also a small credenza to the right of the fireplace with the tv on it would work with new smaller sectional and new placement ,but I would add more insulation and keep the area open

You can get gas fires now that don't need to be built in and don't need to be flued - so you can take them out of the room in Summer so they are not in the way. They run on ethanol and may be the go to save space. If you don't want a gas fire there are better, and more cost effective, heating options but that's up to you. I'd put the lounge a few feet inside the wall on the right wall (as I'm looking at the plan) and, if you move the door you can have the other chairs and table L-shaped around the rest of the room - left and north with a nice big carpet in the middle of the room. You might need another little side table for the lounge unless you are having an occasional table in the middle of the room. Just make sure you'v got somewhere for everyone to put down their drinks within arms reach.

check with the maker of your wood heater and with their specific guidelines you may be able to have a built in arrangement around the heater although the flue will need to be enclosed with a frame and wall cladding to have the mantlepiece which would then project a long way into the room? but, unless the maker guarantees the safety of your fire enclosed under their guidelines i suggest you may be better off to consider a new heater specifically designed to be built in with a flue that can be directed horizontally through the wall or up through the old space behind your heater but they must be installed by experts to ensure safety

I don't know why people keep referring to these fad-driven green walls as sustainable - they are not. Green walls are completely unsustainable, when you consider what sustainabity really means. They are nothing but a Frenchman's idea that he pushed heavily to the landscaping industry that is now being touted as an environmental solution to housing insulation. They are actually useless in areas of high heat, especially when accompanied by high wind and low humidity. Most cities in Australia are not suitable because buildings are too exposed to the elements. Trees are actually required to increase shade to the buildings and the walls, and to increase evapotranspiration - hence the green walls are entirely useless. Of course they will cause fires when the plants die - they are entirely unnatural and won't last.