The plot sort of justifies the In Case You Forgot Who Wrote It title in a strange way, whether on purpose or otherwise: Wes Craven plays himself in the movie, and the whole plot is sort of kicked off by him trying to write another Nightmare On Elm Street film. And to top it off, the script he's writing is based on nightmares he's been having in-story. Thus the film actually is about Wes Craven making (as well as having) a "new nightmare".
Heather's dream about the production of a new film is a startlingly good metaphor for the series itself within the context of the story. The Freddy making the mechanical glove seems less like he's "just" making a glove, and more like he's giving form to something that was already there and was demanding a body, as the glove starts slamming around and twitching impatiently before he's even put it on. A telling detail is him soothing the prosthetic before he braces his right hand against the table, and picks up a cleaver in his left, and seems to hesitate only to prepare for the pain before cutting his hand off without any further thought. In a similar way, Wes, Robert, Heather, and everyone else in the franchise all had a hand to play in keeping The Entity contained and sacrifices they had to make, lest it begin thrashing against the walls of reality and cause more damage than it was intended to.
Remember how Freddy was originally conceived as a serial killer who preyed on children and a sexual predator as well? What did Freddy really mean when he said he "touched" Dylan?
