Help! Our living room is stuck in the 1950s!?

Try taking the wood panel out if its in your budget and drywall it and paint...the fireplace try taking the brick out from the sides and up to a foot and a half and then put a shelve over it those that are specifically for above the fire place. If you can't afford it paint the wood with a high gloss indian white and also the foreplace decorte with dark furniture like your couch and try having you tv in fron of the couch cross the wood paneling.