Hey there Anthony, what did you end up doing with this space? Bit of a tricky space!

My husband loves the ceiling only suggestions and also keeping the timber below the dado. I'm not as attached to all the wood and after a total revamp .... I had thought white ceilings and lime washing walls, but realised I'm after a brighter interior. I will have a look at different painted wall panelling. Definitely don't want to go from a wood overload to a white overload! MB you are so right choosing a white is the hardest part! I'll be in touch Milray Park. Thanks for the input and advice everyone!!

all heaters and stoves should have very specific installation instructions including distance above the stove to any mantlepiece and i suggest you start with advice from local suppliers and then confirm with specific written instructions from each manufacturer that you can usually find on line...There are a number of heaters that have wood fires that are designed to be inbuilt in a purpose made wooden frame so hopefully this can be done inside your opening

Our last house and our current house both had wood floors and lots of wood furniture. Using area rugs (I've got a weakness for oriental rugs) provides separation between the floors and the furniture. And if the walls are light, as in LesleyH's photo above, you will certainly not feel overwhelmed with wood. The only time there's an issue in my mind is when the walls are also wood clad - that can be a bit confronting and needs management.