I can confirm that the game works with a Microsoft Sidewinder Precision Pro joystick and have played the game to 100% that way. Mind you, that was in 1999 on Windows 98.
I’ve not tried it with an Xbox controller since, but my (now rather old) Sidewinder still works with the version of Rogue Squadron I got from GOG. Make of this what you will!
Walk away NOW. If the issues are known ahead of purchase insurance won’t cover them. You do NOT want to have to declare subsidence on your insurance quotes - most brokers just won’t cover you. Almost everything you said is a huge red flag and there are probably more “nice surprises” to come. If you have a mortgage approved already then go and find another property.
If this is your dream house, at least get a building & contents insurance quote before you go any further. You don’t want any further surprises.
Edit: source: bought a money-pit house, thought we had subsidence, we didn’t but it was a huge hassle and a lot of stress regardless. We got a bonus moth infestation out of it, though!