Yes. Domain root is the homepage. When I type in site:www.mysite.com there are lots of subpages shown (not as the first thing though). The main page doesn't show up. The only time the index page www.mysite.com is shown in the serps is if I type in the brand name. Then the title and description of the DMOZ entry is shown.
Not sure if I understand you correctly here. The internal link structure hasn't changed for years. It's not a subdirectory or anything. Not the subpages seem to be penalized, since the rank excellently, but the homepage seems to be having a knack.