Why Did Winifred Kill Billy?

She enjoyed a relationship with William "Billy" Butcherson when she was a young woman, but when she discovered him cheating on her with her sister Sarah, she flew into a jealous rage and fatally poisoned him, sewing his mouth shut with a dull needle so that he could not reveal her secrets even in death.

Why didn't the Sanderson sisters die in the kiln?

The characters assumed fire would work because of the stereotype. Binx doesn't think they're dead and he's more in the know about magic stuff than they are. The magic of the candle brings them back for that Halloween night and for then they are invincible - which is why they don't die in the fire.

Why did Winifred sew Billy's mouth shut?

According to the movie, after Winifred found out about the affair, she poisoned Billy and sewed his mouth shut with a dull needle, hence that thick thread on his mouth when she wakes him up from his eternal slumber. It supposedly was meant to prevent him from telling his secrets, even in death.