The original station was much larger and 1/4 mile closer to the Downs. BR cut the line back in the 1980s and sold the original station site for housing, that presumably being the estate you walked through.
Yep, at one point (quite obviously, given its name) it was the preferred station for the racecourse, and the line also had double track all the way to Sutton. Nowadays, for those who choose to go by train, Tattenham Corner is often preferred. The latter usually has a better service frequency at any given time, too.
If you look on various OS maps you can see the outline of the housing plots seeming to indicate that every effort was made to allow those two lines to join up, as the path of the railway was indicated even beyond its old, grander terminus at Epsom Downs, but I have never seen much other evidence to support this, and it would be very disruptive to the local area to try to link the two lines now. It would serve some benefit to provide a direct rail link between East Croydon, Purley, Coulsdon and Sutton, as well as the surrounding catchment areas, but put it this way: I don't think it's on any of the plans for local development, though I could be wrong!