The cellar commode served an obvious purpose in homes with just one bathroom and large families. The cellar was a convenient location because that's where the drain went anyway, (which is why it is also located next to the washer.) Oftentimes, there was also a large, utility sink located there as well. It could be used as a "suds-saver", recycling the soapy water that was used in the washer. You might get 3~4 loads of laundry out of the same batch of wash water while it was still lukewarm. Whites and linens were always first, colored and extra grungy clothes later. They didn't recycle rinse water. Water was cheap. Heating it and adding soap cost money.)
There were two reasons for the cellar clothesline. One is that it's too blasted cold in winter to hang the clothes outside. The second was that drying indoors minimized the soot that landed on the freshly washed laundry when the mills were in full-swing.
The old-timers really were quite sensible.