You can put the TV over the fireplace, not the best situation but the way the room lays out it is the only logical place to put it. If you could you should add one additional layer on your mantel that could extend it out another 4" to deflect the radiant coming from the fireplace. I would also mount it on a slimline mounting bracket and have the bottom of the TV no further than 4" above the mantle. Ideally you want the TV to be in as straight a line as possible with your eyes. You don't want to look up too high at the TV, it's like being at a sports bar. Also if you can snake up the power and the HDMI from the cable there is a box they make that has both in one so it makes for a very clean installation.

Carpet has come under fire because of the allergy/asthma reactions. Carpet can hold dozens of pounds of human skin/dust/mites in it. It can never be fully cleaned nor can the dust be completely removed. Because of this, many people are looking for solid flooring options which reduce allergens, reduce asthmatic events, are easier to clean and last longer. High end carpet (the stuff that is worth more than hardwood) still has its place in high end homes - often times in luxury bedrooms/luxury appartments (noise issues have to be taken into consideration) but on the whole, the general public is shying away from wall-to-wall carpets. Cork flooring is seeing a huge increase in sales because it "takes over" for carpet. Soft, quiet, warm, easy to clean, hypo-allergenic, antimicrobial, instect resistant. It is the "go-between" type of flooring for people used to carpet who need to move to solid surfaces for their health. As Canadians, we love this flooring because it is so warm.

Get the professional sander guys in to repair the living areas and kitchen but don't go too dark with the stain as it will kill the lovely grain in the matai. I'm thinking a couple of tones richer than the timber knots showing in your photo, definitely no yellow tone at all. In NZ stepping on to carpet especially in a kiwi winter is so much nicer than a cold floor board shock!!! A nice area rug for the lounge and you're done.

I would continue with frosted glass like the door on all the windows because the view of the other house. Not sure where you live, but you can get a frosted window film that you install yourself. In bedrooms and lounge, depending on your style, you might like a woven roman shade with silk drapes.