If you're going to do it right, you may want to consider the largest insert or freestanding stove that will fit in there, new liner is a must, and make sure the liner size is matched to the stove outlet size.
The insert you have is going to put some heat out, but a larger one will do a much better job for your size space.
These are not like the old days, where you threw in wood and let it burn like hell. The research and effort taken to burn these stoves properly is not very overwhelming, and in time, you will know exactly how to burn in whichever stove you choose.
The positive side, you have plenty of room to run a new liner up that old chimney. If it were me, I would definitely make sure the liner is insulated and a block off plate is installed in the old damper area of the old fireplace.
Some new stone veneer on the face would look great!
If you go with that insert or any other, get the blower for it. Between the block off plate & the blower you will notice the difference right away. A good bit of heated air is going up that old chimney cavity as is, and that is heat that could be going into the house.