They can still use the courtyard for HHN, you can easily move security elsewhere (this shouldn't be blocking them from expanding).
While I want more houses, crowds suggest otherwise (with the exception of IPs). When some of the originals become walk-ons later in the night, it suggests that the event hasn't hit a tipping point house-wise. I think the event does need a fine balance of IP to Original houses to slow down the demand at the other IP houses. (Sorry, Monsters doesn't have the IP draw of other houses).
A show at Bourne/BMG/Horror Makeup would move extra guests to an otherwise vacant area during HHN at the front of the park. That'll help alleviate NY/San Fran/MIB area post-HNF.
It's gotten better, no doubt, but there are still a few issues, and bottlenecks that still occur. Parking has gotten better, security is quick, and houses are back to normal staffing level.