It might be. Many stories are based on true events with some fictional elements added for dramatic effect. For this one, you'd have to research the source to be sure.
Definitely. 'A House on Fire' takes elements from a true incident and dramatizes it for the screen. It aims to bring attention to the reality behind the story.
Not necessarily. It could be a blend of truth and imagination. Maybe there's a kernel of a real story, but it's been embellished and fictionalized to make it more engaging.
The theme of trauma is quite common too. The survivors may have to deal with the psychological impact of the fire for a long time. Flashbacks, fear of fire in the future, and difficulty sleeping are some of the things they might experience. And there could be a theme of hope, as they gradually move on and start anew after the disaster.