I'd be temped to paint it white and either put a black cast iron insert in or line out the opening with brick (love the herringbone example shown below) and put a wood burner in. http://www.chesneys.co.uk/products/accessories/interior-panels/ches-brickherin

I’m no expert but if you want a nice clean finish it’s best to get a plasterer to skim the walls. You could try some filler like Polyfiller in the dips, let it dry hard then gently sand smooth.

Lovely garden. I had a little garden a while back that had white painted walls and lightish grey painted fence with natural decking. The grey made the fence recess and the garden feel bigger and the white reflected light and made it feel bigger too. The planting looked amazing against both because the greens really pop against the homogenised background. So I think you should paint it too, but personally I'd find a complementary grey. Cream and grey are great together.

Aw shucks guys! Thanks! I’m definitely aiming for a tiny bit more stylish. My partner brought that heinous green drainer from his house and was everso pleased with himself for solving a problem I wasn’t aware I had! And the el cheapo Wilko kettle is a placeholder til I get a boiling water tap, so I haven’t upgraded it for three years. Plus he’s got a brewing corner in the kitchen, and a 3D printing bench in the utility. I’m just glad to have his wallpapering skills! Though we had a difficult conversation when he replaced my Henry who fitted under the stairs for his Dyson which doesn’t :-)