it was that place as described. I'm just not given the option to go into his house or the dialogue option to mention it to him
Some SPOILERS here:
If you've already found Real Blacksmith, the key doesn't do anything. It's only used to allow the first, fake, blacksmith to sell you items without having to complete the Sewers. If you gave that guy the key, the shop would shut down again after freeing Real Blacksmith until you found the swindler in the field to return the shop stock.
If you never delivered the key to the fake blacksmith, but still freed Real Blacksmith, he will just open his shop like normal. The blacksmith's key will still be findable out in the field, but it won't serve any purpose since nobody needs it (Real Blacksmith is able to get into his own house just fine, apparently).