You can reline it and use the open fireplace but it's much more expensive. A poured liner might help in that case, but again they're costly as well.

There are many fireplace inserts which look more like a fireplace than a stove, Fireplace Xtrordinair, the Quadra-Fire 7100fp, and Lopi Declaration come are in that mix. The Hampton HI300 has a look between a stove and a fireplace. One of the newer brands on the market, Nestor Martin, has two inserts which look really nice, very clean modern lines.

As far as connecting the insert to the firebox, it would depend on the size of your chimney and any necessary clearances to the mantle and sidewalls but you basically slide it in. The liner connects to the flue collar of the stove. The fire and smoke are contained in the insert and exhaust out the liner to the top of the chimney.

There is another option you could check out which are the Bellfires masonry fireplaces. Something like this would allow you to re-line the chimney and fix the fireplace. Check around with local chimney sweeps and stove shops for an installer familiar with them.

Here is a link that might be useful: Bellfires retrofit