Simple clerical errors rarely invalidate a contract. I'm not a lawyer though so I don't actually know.
I would have done address line 1, address line 2, line3, etc. I think people got confused by your form because they are used to typing in 1234 Sample Street <tab> expecting to be asked the rest of the information further down. The other option would be on form submit to show what they have put in and say "make sure this is your full address [CONTINUE] [EDIT ADDRESS]."
Don't know about the US, but here in the UK having an incorrect address in a contract may make it trickier to enforce a court decision against a company as certain kinds of documents used in the court process are only valid if served to the Registered Office of the company.
Why would the address on the contract matter? If the contract lists 'ABC' as their address, you still need to serve papers to their registered office which may have always been XYZ, or may have changed after the contract was signed - so in any case you have to ignore the address on the form and use the official one that you look up from the registry.
The only case where I've seen address used as a disambiguator is when treating multiple private individuals with the same name, but in that case also you want some official ID, not the address which may change frequently (and may contain a different John Smith than the one who lived there a year ago).
Well, if putting down the wrong address on a contract is enough to invalidate the contract, then people would be "accidentally" fudging their addresses all the time. :)
Really, I am no legal expert but I did once sue someone in small claims court. They wanted to know what I did to verify the other party's address, not just taking their word for it.
I would have done address line 1, address line 2, line3, etc. I think people got confused by your form because they are used to typing in 1234 Sample Street <tab> expecting to be asked the rest of the information further down. The other option would be on form submit to show what they have put in and say "make sure this is your full address [CONTINUE] [EDIT ADDRESS]."