After I had built my modest house at Lakeview and furnished it I decided to build the main hall addition which promptly shuffled the furniture around to the appropriate place. Now I have the option to rebuild the entryway which is what I thought already happened when I expanded the size of my house. So what, at this point, would this option offer since my entryway seems to already exist by default?

Did you furnish your entryway when it was a small house? If you did, "remodel entryway" simply takes away the bed, table, cooking pot, etc. and makes the entryway empty (aside from the chest that's already there) so you or your steward can furnish it with display cases, rugs, a bench, etc.