Multiple posts.

Is there already a chimney in place? The space looks very small, so consider a thin stone veneer and a small, electric fireplace for the look without the need for major construction. See Houzz photos under "electric fireplace" for ideas of style, incorporating storage.

Installing a wood-burning fireplace in a farmhouse is not for DIY, unless you are up on codes, proper insulation, proper fire-proofing, etc. Save yourself a burned-down house and have a pro do the install. You can save some money with the cosmetic finish work, if necessary.

#1 is the only one that works with your doorways. But I would rethink the sectional pieces which look too large. You will need at least a floor lamp. Your table/chairs looks narrow in relation to your sectional - is it to scale in the drawing? You may not have enough room. I would use a sofa against the wall and two chairs on either end facing toward each other.