Why is the Weasleys' house so cramped on the inside? I understand that, from a plot device perspective, having their house be cramped (as was described a few times like Ron and Ginny's rooms) further connects the reader to their poverty.
I was hoping for an in-universe explanation as to why the Weasleys (or any magical family) would not magically enlarge the inside of their house. It has been shown several times that things like cars and tents can be magically enlarged so why not houses?
They don't need a BIG house. They can enlarge storage spaces if necessary (closets etc...); and smaller rooms make it more cosy and means less space to clean (and hopefully, less junk around, since junk tends to fill all available space).
All we know is from Harry Potter Film Wizardry, elaborated on in HP Wikia:
In the place The Burrow came to stand, once stood a little Tudor building with a large stone pigpen on the side. It's unknown what happened to the building, but after Arthur and Molly Weasley's marriage, the family settled in the pigpen. As the family grew over the birth of their children, the couple started building upward with add-on bits of architectural salvage they picked up wherever they could find.1 By the 1990s, the house was several stories high, with four or five chimneys on the roof, with all the appearance of being held up by magical means.
So it can be speculated that it's the same reason people don't refactor and re-engineer old spaghetti code - you never know what you'll break.
Frankly, I'm not aware of any better "reason" in-universe. We can speculate, but JKR never addressed it in books, interviews or as far as I can tell Pottermore so far, though that may get addressed once Pottermore catches up to book 7.
I think it's important to remember that Molly Weasley wasn't a fan of enlarging charms, so it may have been that The Burrow was made only as big as was possible through plain old manual labor. (Note: Mrs. Weasley doesn't seem to be opposed to using magic at all when it comes to home construction -- Harry notices, when he first arrives at the Burrow, that magic seems to be holding the Burrow upright and keeps it from falling down in on itself).
Harry couldn’t see how eight people, six large trunks, two owls and a rat were going to fit into one small Ford Anglia. He had reckoned, of course, without the special features which Mr Weasley had added.
‘Not a word to Molly,’ he whispered to Harry as he opened the boot and showed him how it had been magically expanded so that the trunks fitted easily.
Chamber of Secrets - page 53 - Bloomsbury - chapter 5, The Whomping Willow.
Some may ask, "Well, what about the magically expanding tent the Weasleys used at the Quidditch World Cup?" I think it's important to remember that Molly didn't go to the Quidditch World Cup in Goblet of Fire; she stayed home at the Burrow. As well, the tent the group used at the World Cup wasn't even the Weasleys' property -- Arthur borrowed it from a co-worker (Perkins, who, unfortunately, had been rendered unable to camp much, due to a magical malady called lumbago) and even then the tent wasn't super big. It had three modest bedrooms, a kitchen, and a bathroom.
The Weasleys took pride in their few precious possessions (for example, the Weasley clock and Molly's brother's watch that she ultimately gave to Harry for Harry's seventeenth birthday -- in the book, JKR makes sure the reader knows the watch is well worn and a bit beat up). So, while the Weasleys may have been able to use the extra room an enlargement charm or an undetectable extension charm might bring, one might argue that the Weasleys would reject utilizing magic of this kind -- they are proud of what they have and may not feel like they needed to use magic to appear wealthier than they really are.
And it really may not have to do with perceived wealth. Molly Weasley uses a lot of magic in cleaning and organizing (see chapter 6, The Noble and Most Ancient House of Black in Order of the Phoenix -- well, most of the chapters in Order of the Phoenix that take place at Grimmauld Place feature a lot of cleaning spells and magic) -- perhaps she simply didn't feel she needed a larger home.
The Weasleys did not use an Extension Charm because it was illegal to do so.
From JKR's writing on Extension Charms on Pottermore.
The Extension Charm ('Capacious extremis!') is advanced, but subject to strict control, because of its potential misuse. Theoretically, a hundred wizards could take up residence in a toilet cubicle if they were sufficiently adept at these spells; the potential for infractions of the International Statute of Secrecy are obvious. The Ministry of Magic has therefore laid down a strict rule that capacity-enhancement is not for private use, but only for the production of objects (such as school trunks and family tents), which have been individually approved for manufacture by the relevant Ministry Department. Both Mr Weasley and Hermione Granger were acting unlawfully when they enhanced, respectively, the interior space of a Ford Anglia, and a small handbag.
With Arthur working for the Ministry it would be highly risky to enchant the entire house! He was lucky that no one from the ministry discovered the enchantments on the car.
The one documented larger-on-the-inside spell I can find is the Undetectable Extension Charm, used by Hermione on her bag in book 7. It's noted in the book that this was a very advanced spell, and something Hermione was quite proud of. If enchanting something as small as a bag with this spell is difficult for even Hermione to handle, it stands to reason that casting the spell on entire rooms is beyond the skill of most wizards.
It's likely that a similar spell was used for the tents the Weasleys use at the World Cup (later used by Harry, Ron, and Hermione in book 7). These tents were not owned by the Weasleys though - they were borrowed from one of Arthur's coworkers at the Ministry. If they had to borrow someone else's enchanted tents, it stands to reason that the enchantment is too complex for the Weasleys to perform on their own, and that enchanted tents are fairly expensive. I think it's reasonable to assume that having their house enchanted with the same spell would be beyond the means of the Weasleys.
One possibility is that things like the car and the tent are enchanted in such a way that they interact with other things as though they themselves are smaller than they really are. Neither the car nor the tent belonged to the Weasleys, so it's entirely probable that they are, by their nature, larger, more expensive and exorbitant items that the Weasleys would have been otherwise unable to afford, but were able to magic into appearing small. They cannot afford a large house, so being able to magic it smaller or larger is moot. As for Hermione's bag, an explanation could be that the bag itself remains the same physical size and the magic is actually imposed by the bag onto the items placed within.
