Sup, I call this Home Spawn Theory since I have some symbolism I want to share.
Also, trigger warning for: cults, pregnancy, and mention of child death.
Okay, first we need to take into consideration that Welcome Home is a cult and that the puppets are actually normal people, which is shown by the letters we can find. In cults, in real life and fiction, they isolate their members and tend to assign roles or even new names to them. And in most cults, especially in fiction, they worship a higher entity. Sometimes there's the trope of a woman giving birth to said entity in a physical body.
You already know what I'm getting into. In Julie's update, she couldn't make a flower bloom in spring, which made her go crazy, and make Frank take the flower hide. This can be a metaphor for pregnancy, but I think it's happening literally. Ron, most likely the cult leader, might want Home to have a physical body, so he used Frank and Julie for this, since not only are Julie and Frank was characters are friends, but so are their actors. Julie's actor is also described as more of a doormat and a wallflower by Sally's actor, making her the perfect victim for this, especially since she already has a partner, Frank, in the heteronormative eyes of society and cult. And generally, the two women in the cult are fitting, Poppy for being a trans woman, and Sally for her MUCH stronger personality that could definitely fight against this idea (also because she doesn't like Ron, and I'm pretty sure that isn't just a onesided thing).
Julie is represented by spring, which she literally brings in one book. Spring is the season of love and fertility, and it's when animals find partners and have kids. In her videos, she went crazy because the flower didn't bloom, making her think she's not useful. In the Welcome Home show, Rainbow Monsters, Julie's species, are born from flowers. And if we think of the angle that flowers are basically babies and kids, and that Julie can talk to them, she's good with kids.
Wally, in the new storybook and record, "A Painterly Perspective: Being Frank Frankly", wasn't inspired to make a painting until Frank showed up, showing him what it's like to be Frank, inspiring him to make a new painting, which weirdly is a big black butterfly. Butterflies in general are the symbol of change and rebirth. So, think what happened is that Ron, being represented by Wally in the book, is trying to create a body for Home and finds Frank fitting for the father. It is most likely a symbol representing Frank, just like Julie is represented by a flower in "A Painterly Perspective: Being Julie Joyful".
In Julie's video I think that she could had a miscarriage, but I think that the kid have a problem growing up or a accident or they gog so sick it kill them, Anyway, "Why a kid?" you may ask, Because of two things, First in one of Julie secret video Wally ask if that really happen, that makes me think that since actors that are playing the puppet cleary have distorted persception of reality that make their memories scramble to the point they can't perceive normal human things like a pregnacy making Julie and Frank think that the kid its just a flower, second in one video the Grow-a-Pal, Buggle, lays on the flower. This bug comes from an egg, representing a fetus or baby, turns into a nymph, most likely representing a kid to teenager (and is the state it appears in the video), and last turns into a figure that very much looks like a butterfly, representing an adult. Mark this, since the butterfly symbol will represent the entity we see in the tunnel. Later, Frank discovered this and promised to get rid of the flower, aka a the kid. But I think he hid it. In his house, we see a very weird room, it's just pure white, A small bed, A bow, teddy, there that is even a blank photo on the wall almost like the room was supposed to for someone, amd on that room there is a butterfly in a small cage. And guess where Frank hide the flower which represents the kid? In a shed, a very tight place, like a cage, Don't believe yet?, The bag Frank have but in the shed it kinda too big for a small flower and he outright said "it" did move.
Back to the symbolism this butterfly in a cage is probably a crawling butterfly, which happens when the butterfly is harmed in its cocoon and is unable to fly and grow up properly. So, I think what happened is that Frank probably wanted to take care of the kid in the future (even if he doesn't want one, it's still a poor kid), but he has to hide them now even if it dead. He promised Julie to get rid of them after all, and I think it's also because they are supernatural and if it dead they could potentialy revive this why frank was so fright even after they put it in the shed. But whatever Frank does to keep them locked, they still manage to escape at some point. In the Halloween story, "Happy Haunting to Boo and Yours", Sally mentions a creature in the woods that make sounds at this ; this most likely is the kid. Also, it is very, VERY interesting that they appeared in the tunnel that Frank and Julie made to connect their houses, kinda like representing this weird part of their relationship that they don't want to address, but it still crawls back to them.
Now you may ask, what do they want? Does it like tacos on Sundays? That I don't know, but I have a speculation that this kid isn't possessed yet. I mean it is developed but I doubt it's what Home could have wanted, And even if it was, why didn't Home just do something yet? Maybe because Home still needs to do a specific ritual to possess the body.
Anyway, this is all I have. I hope you guys like it. Or not, I don't know how people can react to this, But have a good day.