Question: Where were Lonnie's friends from the first movie and why didn't they appear in the 1978 flashback?
Question: Why does Michael head back to his old house and why does Karen go inside it by herself?
Answer: It was his own personal man cave, he was born and raised there. It was the only place he felt safe and secure. In just about every "Halloween" film he always returned to his home. It belonged to him. I personally believe Karen went there to get a feel for the place, trying to make sense of everything. Why does a normal kid turn into a ruthless killing machine, was it just him or was it the house itself.
Answer: The flashback occurs some time after the ending of the first movie. They likely just separated in the meantime.
TedStixon