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Wow, your house is packed with character. It just seems to need someone to show it off a little more. I love the textures of the brick wall for instance.
Other things I personally would do is definately paint the kitchen cabinets, but also take away the panelling in front of the stairs. I think the room would feel more open if the stairs weren't so closed off.
I would also paint the brick wall behind the fireplace in a light color.
I say throw a Moose head over the fireplace and call it done!
Kidding! That's a great place you have. I think that floor will actually look much brighter once the walls are brightened up. The paneling is making the floor look darker than it is I think. Do this: Look at the floor by the white wall and cover the rest of the screen, see how the light changes? Your home has tons of potential! Keep us updated please I'd love to see the finished product.
Love the wood floor, it is stunning!!! Please leave that whatever you do. The room has character. I would go with Ralph Lauren hunting lodge with roses, plaid, leather or shabby chic and go light. Either way love the room already, great bones to work with. I know you said more modern, so hmmm there is so much you could do going that way as well.
I think you've been given some good advice. Changing the floors is the least of your concerns, I think. The present hardwoods look nice. The paneling could be painted or colorwashed. Do a google search for beachy things to see how that might look. Or, paint them. But do your research on how to do a good job. Those knotholes will bleed through a basic paint job. You might have to incorporate them into the design plan.
Decide how you want to treat your fireplace and kitchen cabs as you are deciding what to do with the walls. You want everything to blend. Gray cabs with the red tones of your floor should be really pretty together. There are a million grays out there. You should be able to find one that looks great with the red tones of your floor. I think I'd paint the fireplace too, or at least add some paint to the bricks, and I'd want a nice deep mantle too. I like the idea of putting stone over it too. An insert for gas would make your fireplace usable every day of cool weather, so if possible, you could do that.
I will mention one thing. When we pulled paneling down in a family room many years ago, we discovered there was no drywall underneath it. This kept the room cold in the winter. That house was built in 1965. You might check to make sure what is under all that paneling. If there is no drywall under it, then you might want to do drywall in the future, for a warmer house. (I am not sure if drywall over studs is a code violation.)
Your cabs could be white on top, and gray on the bottom. Your fireplace could be the stone you like in shades of gray/white/brown. Your counters could be granite or quartz to speak back to the fireplace colors. Your walls could be a soft blue gray, or even a color that harmonizes with the neutrals you are using. You have an interesting space to work with. Good luck!
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