Regarding the house.. I do believe initially with part 2 it was simply used for recognition and continuity. We have to remember that the script for part 2 (written by David Chaskin) was actually an unrelated, stand alone horror movie script about a haunted house and demonic possession. It was shoehorned into being a Nightmare sequel, and i must say they did a damn fine job of doing so, it
feels like the same universe as part 1. And given those circumstances, it makes perfect sense to use the same house from part 1. Especially sequel-wise "the new residents never knew what they just mortgaged.."
Also, Nancy's forgotten diary in Jesse's room was an excellent touch.
And along the lines of serendipity, the house itself became a recognized "character" in the series in it's own right. Haven't read Wes' original script for part 3 in a long time. But I do remember he did in fact
not use 1428 in his script. Instead, he opted for an old run-down hathway house or something outside of Springwood, where Freddy had been born. Chuck Russel decided to turn that into 1428 instead. I agree, from a logical standpoint it doesn't make too much sense to use that specific hous as Freddy never lived there. But I do understand the reasoning behind it, as trhe house had become pretty iconic in the series by that point.
Another aspect of Wes' script that was completely removed in Russel's vision was that the script didn't even take place in Springwood. It was an unnamed town. And the kids at Westin Hills came from all over the states and suffered Freddy nightmares. Early signs of Freddy going apocalyptic? Anyway, I have to give Russel credit here over Wes here (a rare exception) for setting the story square in Springwood and having the kids be the children of the lynchmob that went after Freddy. That change on Chuck's behalf felt much more in tone with what Wes actually laid down plot-wise for part 1.
But apart from the house being iconic and recognizable on screen, it still doesn't make a lick of sense that Kristen (and the other kids) constantly dreamed about it. Sure, I have no problem believing Mrs Parker was part of the lynchmob. It's also a pet theory of mine that sergeant Parker in part 1 was Kristen's dad (retrospectively). But still, "Why are you obsessed with that old Thompson house, Kristen"? is something I honestly could hear Mrs Parker burst out..
I'm inclined to believe it's basically an idea to tie all the movies together. The
real problematic issue starts with part 4. "It's not just a house, it's his home. He's in there and he's waiting for me to dream." C'mon, that's a total glaring retcon. Sure it's subtle enough at first, but when you really stop to think about it, it makes absolutely zero sense. Aaaand it paves way for the biggest retcon of them all; part 6 where Freddy suddenly is a married family man living in 1428..
I'd honestly would have liked to see far more of the boiler room and much less of the house. why not use the different kids' own houses and environments instead?
In New Nightmare, it makes perfect sense again though. Sadly, the interior is not the original house. I remember Wes' commentary track that he actually beat himself up and lamented this decision. Let's be honest, it would have been epic to have the same interior; Nancy's old bedroom, the basement, the door leading down to the boiler room..
He also said that someone at New Line said "We do still have one of the old run-down versions of 1428" after filming was wrapped.. "Well, why didn't you tell me?"
It also makes perfect sense in FvJ; the new residents..
I do however like the old fan theory that's practically become almost canon; Freddy's soul was trapped there in part 1. However in part 2, he basically breaks free and literally returns to the boiler room at the power plant..