Finding the Hermit's House in the Deep Woods of Granite Falls is an activity exclusive to players who own the Outdoor Retreat Game Pack. Befriending the Hermit is a requirement of the Outdoor Enthusiast Aspiration that comes with the pack. This hidden area features some great fishing, herbs, insects, and a potential new friendship with the old Hermit. It's also easily one of the most beautiful areas in the game, with a relaxing landscape and dazzling waterfalls that these screenshots can only hope to depict in their full grandeur.
To access the hidden area, first head to Granite Falls Forest National Park. There, you can use the cabin and screenshot above to help you locate the cave you need to investigate. Once you get a Sim there and select Explore, you'll get a variety of choose-your-own adventure style pop-ups. First select to Step Forward as opposed to quitting the adventure. You may need to try this a few times to get the right option, or different ones may offer alternate routes to the area, but one in particular is reliable as far as I know at this moment. When one appears that offers you to Go through the Web, take that option and you'll be on your way to the Deep Woods. Next, you should be offered to Ignore the Object or Sally Forthand finally Approach the Sim. That Sim is the Hermit and you've found your way through the cave to the secret area.
The Hermit will vary in gender from game to game. Becoming Friends with the Hermit of Granite Falls is fairly easy, so long as you bring a Tent to let your Sim sleep should they grow tired. This is required in Milestone III of Outdoor Enthusiast. There are amenities to help your Sim fill their needs in the area. If you visit the lot a second time and can't find the Hermit, use your Sim's phone to 'Invite to Hangout at Current Lot' and select the Hermit. They should arrive so you can continue the process, and once at Good Friends, you can select 'Learn Herbalism Recipe' from the Hermit to acquire the Fungal Infusion Fertilizer Recipe.