HOUSEKEEPING'S PROFILE

That area's a secret dungeon that's basically the hardest level in the game. It's probably a good idea to actually beat the game first before you try it, but if you really want to go there, the hint to solve the puzzle is written on the tablet in the middle of that room. Here's the quick solution:

That cave contains an enemy encounter with a frost giant that drops a strength nut; when you first meet Richmond, he gives you directions to that place first instead of where you need to go, ostensibly so that Rutger gets eaten, but he thinks better of it when threatened.

Anyway, here are the directions:
-Start at the southern entrance.
-Head north until you hit the three stones, then keep heading north.
-Once you end up at the little spring, head north two screens.
-Head east for four screens, then head south until you reach the house.

-Walsh is in Balfur castle's dungeon. Looks like the new management didn't like him much.
-After talking to Magnus in your town, you should go to that area on the surface where you had the shared dream--this was the level right after Ivy rejoined. You'll find that Rutger's section has changed to fit Leif, so talk to the new npc there.

In a roundabout way, yeah. You can use the tree-bending stick to get past some little trees that block a path in the forest north of Mossvine. There's a little side path in the northeast of that dungeon that's "secret" (it's fairly visible, but it's one tile large and partially obscured by one of the border trees).