I am a bit confused, are you saying you have two bedrooms in a cottage (presumably with windows) upstairs and a downstairs living room with no windows? Or a downstairs bedroom with a window?
If you have any downstairs rooms with windows I would covert these to the living room and use your windowless room as a bedroom.
I would see what wall could be knocked down to make way to a window.
Failing all that I would install light boxes, which kind of act as fake windows. Some may even be coloured so you have the impression of a frosted glass window with light, or even sky or trees outside.
These are not cheap and cost money to use (electricity) so I would only go for this is the option to change the room is not there. A slightly pale blue light may be better than really bright light boxes. This is aside from the regular lights. If high up, so people cannot look out, it can give the impression that you are in a room with high, (maybe frosted) windows.
Google 'How to Make a Cheap Lightbox'
e.g.
I have no idea how much this costs
this is for office space but you could adapt
the fact I cannot see any prices makes me think they are costly!!
In your shoes I would check out any big companies that may be doing a refurbishment and may sell on old light box display etc.
I'd also make everything you can in the room into white colours, plus blues and greens, lots of plants to give an out door indoor feel.
Re I did consider painting the wood but my main problem is the fireplace, its floor to ceiling old fashioned carved wood with a marble inset. It can't be taken out without some serious ££'s as its connected to the gas. Do you think if i pained it it would look ok, am afraid it might look like a botch job.
My advice would be to box in the fireplace and use a hight up fake window, light box or mirrow. I am not keen on fireplaces and boxed in, painted white etc would be better. I feel the lack of window means a modern look would go better.
EG the window in this room could just be white light
lots of green and white makes me think outdoors even if indoors
and lastly
white and green, fresh and clean
Re We can't afford to change our sofa which is black leather - Could you trade your sofa for something more modern? It sounds like it would not go in a white and cool space!