The treehouse was originally built by Ethan and his father, Tom Reilly, but he passed away before it could be completed, so Ethan finished it with his grandfather. The treehouse is on a back lot behind Grams house, hidden in a forest and near an abandoned and rusted playground.
The treehouse is Ethan's secret hiding spot away from the world. It is also dark enough that he could come look at the stars away from many of the lights emitted from nearby homes.
In book three: The Oracle of the Missing Dryad, many events happen at the treehouse. It is mentioned in consecutive books and several memorable scenes take place within it. During a time traveling sequence, Abigail uses the treehouse in much the same way as the secret room, portaling in while she is unnoticed by Ethan to take Alyson on certain tasks to reveal secrets about Alyson and Ethan's past, and why it is so important in the present that she become who she is meant to be.
The treehouse represents to Ethan, what the secret room represents to Alyson. It is a sacred place to him, as he and his father built it, before his father passed away. He holds it dearly close to him. When he brings Alyson to the treehouse, this is a big move ... he is allowing her to enter his heart, as the treehouse represents a locked part of his heart.