There’s no reason to choose a nbhd of $x_1$. When we say that $x$ is a limit point of $A$, we’re saying that every open nbhd of $x$ contains a point of $A$ different from $x$, so $x$ is the only point whose nbhds are of interest. It’s entirely possible that for each $n\in\Bbb N$ the point $x_n$ has an open nbhd that contains no other point of $A$ and does not contain the limit point $x$.
Suppose, for example, that the space is $\Bbb R$, and $A=\left\{\frac1n:n\in\Bbb Z^+\right\}$; the only limit point of $A$ is $0$. If $n\ge 2$, $\left(\frac1{n+1},\frac1{n-1}\right)$ is an open interval around $\frac1n$ whose intersection with $A$ is just $\left\{\frac1n\right\}$, and $\left(\frac12,2\right)$ is an open interval around $1$ whose intersection with $A$ is just $\{1\}$, so each point of $A$ has an open nbhd that contains no other point of $A$. Morover, none of these nbhds contains the limit point $0$. The thing that makes $0$ a limit point of $A$ is that every open nbhd of $0$ contains points of $A$ different from $0$.
Now go back to the general situation. If $A$ is infinite, limit point compactness says that it must have a limit point $x$. This means that for each $\epsilon>0$, $B(x,\epsilon)\cap(A\setminus\{x\})\ne\varnothing$: each $\epsilon$ ball centred at $x$ contains a point of $A$ other than $x$. (Of course it’s possible that $x\notin A$, as in the example above, but we have to cover the possibility that $x$ is in $A$ as well.) In particular, for each $k\in\Bbb Z^+$ there some $x_{n_k}\in B\left(x,\frac1k\right)\cap(A\setminus\{x\})$. Then $\langle x_{n_k}:k\in\Bbb Z^+\rangle$ is a sequence in $A$ converging to $x$. The only problem is that it might not be a subsequence of the original sequence $\langle x_k:k\in\Bbb N\rangle$, because the indices $n_k$ might not be strictly increasing. To complete the proof, you must show that the sequence $\langle n_k:k\in\Bbb Z^+\rangle$ of indices has a strictly increasing subsequence.