When I turn the key to open gas valve to light my gas fireplace I can constantly smell gas coming from the key hole. Is that normal? When I shut the valve off with the key I can no longer smell gas.
You certainly have a leaking gas valve. Your symptoms of it leaking only when open are pretty common.
A while back, you could open up the valve and repack it; but, due to this kind of fix being temporary at best, your gas company and insurance company will demand the valve be replaced. So, ignore any advice to repack the valve.
This means it's not a DYI job, as you'll need proof the work was done by a licensed professional, in the event someone asks. Hire a professional, and keep the valve shut until you do.
They will shut off gas to the house, bleed the line free of pressure (gas) and then remove and replace the valve. The real problems that come from such a repair come due to the pipes possibly being seized due to the mortar, or more likely corroded due to moisture (common in such lines). In those scenarios, the details of your exact layout will determine how much pipe might need to be replaced, and how easy it may be to replace the pipe.
If a plumber just gives you a new valve, you're lucky. If they find your pipes are nearly rusted through and you need to replace them, you might feel unlucky, but really you are still lucky. You're just lucky with a bigger bill, but a much smaller bill than if you were looking at rebuilding due to a fire.
Smelling gas constantly is not good, it's dangerous. You need to keep the valve off until you find out why it's leaking. Remove the key plate or valve access panel and check the load connections for tightness since you only smell gas when the valve's open. If they are tight, then call the gas company and have them check everything. In many cases they will do it for free.