we live in a two story, is it safe to run the gas log with the flue closed?
Are these GemCraft fireplaces vented from outside (thru the chimney) or
should we let all the gas heat go up the chimney? It's pretty, but doesn't
really add any heat to the room.We are
hoping for some info from you vets.

Flue must be open

I too have a two story house. You must have the flue open anytime you have a flame in the firebox. To be on the safe side you should also have a carbon monixide detector in your house.

By design a traditional firplace is not very efficient, most of the heat goes up the chiminy. So far I've had four weekend days that were cold enough for a fire. I took advantage of all four.