Why were houses constructed so closely together in early nucleated settlements

To provide equal access to water sources. Nucleated settlements are designed to be like this to enable people to have easy access not only on water but also in other forms of produce like agriculture and domestication. This gives people the equal opportunity to maximize what available resources are within their location.

A nucleated pattern often develops where defense is a priority, such as inside a meander (a bend on a river) or on a hilltop (for instance, Caerphilly). Cardiff developed as a nucleated settlement because its naturally moated castle could be easily defended.