Idk some people just enjoy it I guess.

Well if it was some people alright but I only now realized how big it really is @~@

Oh. Well I mean it's been around for years. I only seen some of the movies, so I can't say I'm a super fan, but I'm aware the series has popularity.

It's the same as any other franchise: Nostaliga stuff. Except here, not only did the readers grow up, the characters in the books grew up at almost the same pace, and the tone of the books shifted along with the aging characters. Basically, it's a perfect release schedule, paired with a surprisingly complex set of characters.

And if you think it's weird how these characters think inside the box, then you clearly live in a box of your own. :D

Yeah, but sadly I gotta share my box with all you other guys :V

What I am more confused about it the lack of interaction between magical and non-magical world especially with how fragile that separation really seems in other places.

To be fair, that part is a little iffy as far as I'm concerned. Mages and magical creatures seem to exist in the real world, yet mages seem to know little of the culture in it. I've even heard that Ron didn't know what soccer is until Harry told him about it, before being sadly disappointed by its lack of broomsticks.
When it comes to the people, I can just assume this lack of knowledge is just a difference in culture, like how most westerners have no idea what's hot down in Africa. (Ha!) But as for the seperation between the magical and normal world, and why it even exists... I'm sure there's a reason, I just don't see it.

The key thing here is that the books are mystery novels, but were under the guise of being fantasy books. Half of the intrigue came from kids solving the mystery along with the main characters as the book progressed, allowing the reader to in turn become more engrossed in the narrative.

Example: Take out all the magical fantasy bits in Sorcerer's/Philosopher's Stone and what do you have? "The mystery of the secret beneath the trapdoor"

Then as time passed and the audience became older and wiser, a lot of the charm from these seemingly innocuous mysteries that had a hint-to-fair-bit of danger gets thrown out the window for complex themes with little-to-no development because the focus had to be tied to Harry. By the tail end of the series, so many characters and themes that were introduced and later so grossly underutilized that I genuinely forgot some existed, at least in my eyes.

Then couple that with all of the supplementary writing and trivia bits through places like pottermore and you have an amalgamated mess that seems to have had little thought thrown into the planning department. But at this point, everything was being fueled by the nostalgia train, and with how things are now with franchises being unable to just die a noble death, the nostalgia boner kicks in to spoonfeed it its life support. The lack of immersion comes from the fact that it never really existed to begin with.