I’m enjoying several of these ideas. I live in a tiny house and don’t have room for a tree any more, so in my quest to find a new option I’ve decided that I’m going to make an evergreen garland something like the picture below. I can make it any length I want to fit my space, I can use all local plants, and I don’t have to kill a tree for it I can just gather branches.
Another idea that I’ve seen done is to plant an ideal Christmas tree evergreen in your yard somewhere that you can see from your living room windows, and keep it well pruned so that it has the classic Christmas tree shape. Then you just decorate it each year. It stays alive, you have a beautiful tree to decorate, and you can sit in your living room admiring its beauty as it gets to live outside. This is also safer because so many other tree options are a real fire hazard in the house.
A few decoration ideas for an outdoor tree.... you can smear a mixture of peanut butter and bird seed into pine cones you find on the ground and then tie them into your tree, this way local birds become your tree decorations. If you live in an area that gets snow you get your tree flocked for free.
To answer your question about harvesting a tree from the woods locally, I would personally say that as long as you are doing it with intention and awareness then it’s fine, because you will be making sustainable decisions.