You could mix stucco (on the primary mass) with tile around the opening, use doors instead of the insert and a mantle shelf that matches the beams above.
That's what I was thinking too. Would be nice to cover that extension to the side with wood that matches your beams, and then bring that all the way across the mass.
I think you do want to combine tile and stucco here. The reason why the brick looks strange is just because there's so much of it. Tile would have the same problem. Instead, tile the bottom (where it touches the floor) and around the opening, then stucco the rest and add the mantle all the way across. That way you break it up into a tile piece and two stucco pieces. Then just paint the stucco that neutral color you already have on the wall, and the wood beams should pop out nicely.