Remember also that Freddy had a wife and young daughter during that time, so there's plenty to work with there. I think maybe if the focus is kept more on Fred Krueger the man, his family and history, and not so much on the actual crimes, I'd be happier with it.
As for the transformation, there was a whole arrest, trial and eventual release we've never seen, that can serve as the climax and the burning can be more of an epilogue.