diamonds can burn, and temperatures reached in house fires are sufficiently hot enough to burn diamonds. cubic zirconia, on the other hand, will survive a house fire.

My experience of a housefire is that there is far more water and smoke damage to contents than heat.

That depends on the response time of the firefighters, ie. how long the fire is allowed to rage.

If it's an old house, there is going to be a bit more "stuff" in the wallpaper and furniture. Airborne cooking grease in the kitchen, and as disgusting as it sounds, human sweat and grease in the soft furniture.

A well-used armchair with a decade or two under its belt is going to go up in flames disturbingly fast when it catches on fire.

Depending on oxygen availability, you're right that smoke will do most of the initial damage, but as soon as the windows blow out, things heat up dramatically.