Why would sealing a balloon framed house be dangerous? I know that you need blocking to help stop a fire from spreading between floors.

If you heat with open fireplaces, then you can't seal the house unless you have really really good artificial ventilation (which you don't because it's 1840 still when you're building this house), regardless of how the house is built. A sealed house with a fire burning in it is a suicide machine.

> A sealed house with a fire burning in it is a suicide machine.

Modern designs use direct vent systems, where instead of using inside air for combustion, they bring in outside air (and then exhaust externally as usual):

* https://www.efireplacestore.com/five-things-about-direct-ven...

The warming of the house occurs via radiant heat and through any conduction of heat via the actual material of fireplace or stove.

That's not an open fireplace, though?

I find the idea that balloon (rather than platform) framing was part of the heating design of a house a little hard to take. The moment we could switch to platform framing, almost everybody did (not least because shorter studs were cheaper). But a balloon framed house with a fire that escaped the fireplace is going to burn only slightly faster than a platform framed house, and the main determinant is not going to be the framing but things like fire-resistant doors and wall finishes.