Yes, the upper floor being a storage for the appliances for Rotom seems to be a good point, with a small kitchen and other decorations.
And even if this was the case, it would still be possible to add a plot point where Silver uses the upstairs to steal in some way.
But I still prefer my first idea that, it is his home.
And his older home is now the home of the supporting character, that is the new girl, or Gold if you're the girl.
Here's a proof that both Gold and the girl live in New Bark Town:
Yes, it is true that the player's mom in this version would not heal you Pokemon. Instead, the Healing Machine in Professor Elm's lab would heal your pokemon.
But unfortunately, I must break through all the possiblity of it being upstairs.
It has been confirmed that the Healing Machine still exists, and that it is still downstairs.
Here's a proof, it's just beside Elm:
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