What to do with this wall?
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After removing the wallpaper and chair rail, you could paint it an accent color. This would be a good 'gallery wall' with lots of pictures. Another idea would be to use pallet wood or shiplap - if you like that look.
You can use a spray bottle with water and spray the wall but not were your drowning your floors, then use a wide scrapper and slowly remove trying your best not to damage your wall. Once you get started it will get easier and easier
remove wallpaper, install a shelf(supported by korbels) full length and deep enough for Knicks knacks or pictures, and create a framed" box" (fireplace) underneath where you could do an arrangement of candles
looks like you have a very eclectic style, clean off entire wall and paint a colour you love and stencil there are so many cool huge stencils out there now!
There are some really nice wallpaper you could replace or strip it, sand and paint. You could put a lovely elec fireplace there with light on the side
Depends on how much time and energy you want to put into it. If this was MY house, I'd leave the paper on it (less work), take the chair rail off, go find the cheapest wood boards I could and then just put pieces of wood in horizontal rows on that entire wall. If it's new wood, I'd stain it with a medium wood stain and then put a coat of sealer on it. Then I'd find (or make) a big, dramatic mirror (maybe a starburst pattern?) and put it on that wall and be done with it. This would look striking and dramatic but should be simple if you're handy with a saw and hammer. Good luck!
Beadboard would be cute....
The picture on the wall is too small. You already have a lot going on in the room, so I would find the largest picture, clock, or any decorative item that will fill up the wall.
Can you make a fireplace surround ........Then above it a mirror or large picture or just a large pic. frame with a medal in the center or any interesting object, Put greenery in the fireplace or at the change of season some lay pcs. of wood ........find scrap wood for fireplace then off to flea market. for other things...I like antique stores or yard sales.
A nice mirror would look good and reflect the light coming in the window.
I like the idea of a faux fireplace,and surrounding the fireplace you can purchase Faux stone or even faux wood peel & stick (and many of them are removable) to fill in the wall background on all sides and above the fireplace. I don't know if you are on a minimal budget or not, but if so, during off season (spring & summer) the faux fireplaces tend to be sale priced. There are many faux fireplaces, or those that are non burning but are electric and also provide heat. I have seen some amazing "Wall Pops" Peel & Stick wall coverings on Zulily.com. I have found some great deals there...maybe you could even find great ideas by checking out their website. Good luck in your project :)
I just logged into Zulily because I get daily emails. As I mentioned in my replied post above, they carry some unique and some brand name items. I found this and thought I would share for anyone interested; https://www.zulily.com/e/wallpaper-that-works-272624.html
Make an indoor water fountain feature. I see in photo that you already have plants to fill in around it. I have this. It's very relaxing to listen to & atmosphere inside is wonderful as it keeps air from becoming so dry from heat which is comforting to skin & breathing tissues. Along with all that, allergy is much improved as there's little dust flying in air. Ashes from cleaning out fireplace do not fly thru air. I no longer even dread that chore.