Gday mate.
Sounds like you're just doing a home-project, type thing - i.e all machines in same building/residence - not something to be accessed from the outside world.
In either case, it's really something that you need a webserver(software) for. That way, you have the file 'home.html' (or another equivalent file) sitting on the server. When it's requested, the server examines it and executes any code in it before returning a result to the requester (usually a web-browser).
With that said, the answer to (1) is to set the location of the current window, rather than opening a new one. You can do this by setting window.location, instead of using window.open.
My answer to question (2) would be to download XAMPP then do a login-page tutorial. Then, your users' names/passwords will be submitted to a page on the web-server that checks their validity before passing them on to the main file, or reloading the login page. Since you've got active code in the home(.html) page, you can check if the user is logged in or not. If not, just don't output any of the concerned page.
This brings up another point - anyone with a link to the login page can view it's source. When this is done, the passwords/usernames for everyone will be visible. This is really not such a good system..
You can get XAMPP here:
http://www.apachefriends.org/en/xampp-windows.html[
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Here's a tute that looks good:
http://www.phpeasystep.com/phptu/6.html[
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