Well in general the rush process is sort of crazy to begin with ... but I have alot of biases towards freshman rush simply because that's what I'm used to.
I really liked freshman year having a pledge mom who was there through boyfriend fights, picking classes, taking me to the movies, showering me with initiation gifts, etc. I liked looking up to the older girls in the house and having them set the example for what I wanted out of college and where I wanted to be my senior year. I liked the home away from home feeling of a sorority house where you can plop on a couch and it feels like a family instead of the dorm which was basically a functional academic prison. I love having freshman in the sorority too because they bring a new level of excitement and they look up to you for advice and guidance. I personally enjoyed rushing freshman year plus my school has 30,000 people so it definetly makes the school ALOT smaller.
The freshman system is by no means perfect, people find out reputations and stereotypes no matter how early you have rush, but I think by sophomore year everyone would have made up their mind about the houses.
I haven't really seen it here that people who join houses are excluded from their dorms or making other friends at all. I think greeks their freshman year have a healthy mix of both.
My two cents