Why did all the land mass [Pangaea] form in one area?
It didn't "form" in one area; the continents were simply joined together through the process of continental drift. To put it another way, the continents were formed in various locations before they were united - though the formation of continents never really stops.
It seems to suggest that there is a significant difference between the two areas of Earth; one area being where Pangaea was located, and the other area being the rest of Earth.
This statement doesn't make sense (to me, at least). There was an obvious difference between Pangaea and the surrounding sea - but there would be a dramatic difference wherever Pangaea was located. Similarly, there's a major difference between contemporary North America (or any other continent) and the surrounding sea.
Why would only that portion of the Earth be above water?
For the same reason only the Americas, Eurasia, Africa, Australia, Antarctica and various islands are above water today.
Is there something significant about where Pangaea was located which made it different from the rest of the Earth?
That's a hard question to answer. You're asking if there was something special not about Pangaea but about its location. Pangaea would have been underlain by its continental plate(s), which was structurally part of Pangaea.