My town grew like most do, until I finally made a commitment to stop designing and acquire all the land. That's when I did my huge rebuild. This was before the nuke feature existed.
When I did the rebuild I left empty lots expecting future buildings to come. I did not want to shuffle existing features to wedge in new stuff.
But now they have released new land and I want to shift half of my town to maintain my town square as the center of the grid. But I can't just nuke it. That would be far too disruptive and take much too long to restore.
I definitely recommend clearing a patch of land, and building new stuff in sections. Its easier to remember the original design if you want to preserve it.
But if you prefer starting from a clean slate, push the button! Boom!
Either way, have fun and be patient with the process. The town is always a work in progress.