NH has has historically had the first primary since 1920 and it started to become important in 1952 when it simplified its voting rules. There is a state law requiring it to be first in the nation, and they've been fighting to keep it since the 70s. Before the IA caucus started getting national attention in the 70s, NH was the first binding indication of the support candidates had.
NH is not a closed primary. Undeclared voters can vote in whichever primary they want and immediately switch back to undeclared. All voting is done with paper ballots.
While NH demographics do not reflect national racial demographics (not even close), the party numbers would probably surprise people. Almost 40% are undeclared independents. NH is more conservative than VT & MA, and that tends to manifest as a 'live free or die' libertarian streak.
NH is small and NH markets are relatively cheap. A candidate without a lot of cash can do a lot in NH-- you can drive around the state for a few days and hit the 'major' cities, and TV/radio spots there are dirt cheap in comparison to larger markets. Even more important, the state parties have massive networking systems to handle the demand. Any candidate can set up a state event in a day and expect a turnout, and that candidate can set up house parties and a place to sleep for free on a dime. And the media will show up.
That last paragraph should say a lot. NH might seem to be a weird choice, but the state has an infrastructure that really doesn't exist elsewhere.
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