I know it probably has something to do with confining Nora to this one room as society has confined her as a "doll" in the household...but I need some help
It is interesting how Nora is portrayed in relationship to her enviornment and her relationship to Torvald. The use of offstage to establish relationships--or lack of-- is one that is very effective in forwarding the viewer to better note the evolution of Nora as a character.
I agree with the idea that the setting provides a cloistered physical space which Nora eventually seeks to escape. This play is really about Nora's place. Nora is defined by others in the space and she defines herself, but only inasmuch as is possible among the people who populate this small, domestic space.
By focusing on the living room, we center the play thematically. The living room has symbolic value. By having action take place offstage, we distance the audience from it, and the focus becomes more about how the events outside effect the people in the living room. :)
I think your original suggestion is perfectly correct. There is a sense in which the way that the action if based on one setting creates a claustraphobic feel with Nora being hemmed in inside this world where she is not given liberty or freedom. Just as a doll is trapped in her doll's house, so Nora, because she is metaphorically a plaything or a toy for her husband, is trapped inside this room.
Another place where the action takes place offstage is the party where Nora is to do the Tarantella. The build up for this dance would make engaged viewers of the play wish to see her preform. That being said, Nora's dance could alienate her character too much (or so some could think). Therefore, it takes place off stage.
One scene in which action happens offstage is the fist scene in which Torvald speaks to Nora through his closed study door when Nora first appears onstage. A possible reason for this is to cast light over Nora as the protagonist and shadow over Torvald as the antagonist. It also separates them socially, showing hoe little Torvald respects Nora. He has such little respect for her that he cannot be bothered to come out and greet her.