It hinges on what your texts are for Advances and Extension 1: can you clarify these? Research into the short-story genre is imperative. If nothing else, do this at least. Some popular authors of short stories:
Jhumpa Lahiri - Interpreter of maladies (collection of short stories, it won a pulitzer prize(!), read some of her stories and write your thoughts in your journal )
Joyce Carol Oates (she has countless short stories. Google her or go to your local library and you'll probably find a large anthology)
Tim Winton (you probably know of him already, look for his short story collections: Scission, Minimum of Two, 'A Blow, A Kiss', and The Turning)
Anita Desai
Aliceson Munro (Canadian)
This is a start and will count as 'research into FORM'. Research into 'concept' is separate, or at least should be initially (I think they merge later on when you have a more specific idea). Like, for example, you can research into the genre that 'the haunted house' belongs to. It sounds like Gothic to me - write about the tropes of the genre, what defines it, what specific sub-genre you're interested in, read or reference novels/short-stories of the genre for ideas on themes and purpose. It's so incredibly broad there's no strict approach, though the more pages in your journal the better. It will help you to pick something that sparks your imagination and gets your story going.
Don't write in your journal and worry thinking 'is this relevant?' - it's your major work and it's your research, so yes, it's relevant! If you can show some sort of evolution and development this is good also. Show how you start at point A, discovered text B, was thus interested in concept X, which led you to text C, which linked to your studies in module A/B/C etc etc etc.
The more you research the easier it is to make links to the studied english courses.
The freedom can be a blessing or a curse, but it teaches you to work independently.