you bring up an interesting point about how this soap could have "gone in another direction". in a way the story we started out with went underexplored... and then it was abandoned entirely for something completely different.
like you i'm glad the show ultimately made the jump. but still i can't help but wonder how things could have played out differently. i enjoyed these episodes as much as anything that came once the show went supernatural. it had a charm all it's own.
I'm not sure it
did go in such a different direction. I think there was the original Art Wallace realistic drama, but that couldn't continue forever. I think that was fairly self-contained. It was like a film that just happened to be done in the form of the first few months of a soap opera. I doubt Wallace had any idea of staying around after that.
And then, there was the longer-term more soap-like, ongoing "story", consisting of whatever generally supernatural ideas the subsequent writers could come up with. My impression from these early days is that they do intend to work the supernatural very slowly and gradually into DS from day one. That's the usual way to tell supernatural stories. You don't necessarily even know if anything really supernatural will happen, curiousity is built up, apprehension, and eventually you see that sign finally that yes, the ghost, or whatever, really exists.
They're always referring to the creepy house full of ghosts and creatures. Everyone always thinks of the house as haunted. We've already heard the Josette story. I think it was set from the beginning that the Art Wallace harder drama would play out, then when that was over, and the show became more episodic, the talk of the supernatural would start paying off, and the world behind the facade of Collinwood would start to be revealed.
I'd like to have seen the town included more in all that, but Collinwood is where the supernatural action is.