We have a wood-burning insert in our fireplace on the main floor. Ours happens to be an older cast-iron stove and TBH, it's kind of ugly. But I can cook on top of it and it has saved us tons of money over the years.
In an older flue, often times, the mortar dries out, becomes brittle and that poses a danger of the fire (and the smoke in a flue can be just as hot as the fire itself) penetrating the walls of the flue and igniting the wood structure... therefore creating an impressive chimney fire... and burning your house down.
With wood-burning inserts, they don't have to go inside the flue to make any repairs. They put in a UL listed flexible steel liner (or you can go with clay, but that is really expensive) that is insulated against allowing any fire through the flue wall.
I'm not sure where you are, but for a few thousand dollars, you can get a very nice looking (flush to the fireplace face) wood-burning insert. It would heat your home and also give you an alternative source of heat in case of power outage.Information on steel liners.
Also google for wood burning inserts and you'll find a ton of information.
One more good resource: hearth.com They have a forum there that has all information about alternative heating, including wood.