That would certainly be the best way to do it:
  public_html/blog/ holds a blog such as Wordpress
  public_html/store/ holds an e-commerce site such as osCommerce
  public_html/auction/ holds an auction site (I'm sure there's something out there... start with hotscripts.com and notonebit.com)
  public_html/forum/ holds a discussion board such as SMF
  public_html/ holds your Home Page (index.html or index.php) with links to /blog/index.php, etc.

You want to keep your various subsystems (applications) separate from each other so they won't interfere with each other, and can be cleanly installed, upgraded, or deleted without fear of breaking other ones. The Home Page can be anything you want -- it just has ordinary HTML links to the index.php file in each application.

When you want some program code to execute on a computer, you either have it interpreted  (on the fly), or compiled and linked  (once) and the resulting binary is run each time. the former is a script, and the latter is not.  PHP is a commonly used scripting language; Perl, bash, Tcl/Tk are a few others. It is a programming language interpreted on the fly on the server to generate (usually) HTML code that's flung over the wall to the visitor's browser. Straight HTML code (.html or .htm) is simply delivered to the visitor's browser. Perl can also generate HTML to be sent to the browser. Whichever way the HTML page is produced, it is sent to the vistor's browser to be interpreted there to display a page. A binary program is produced from a language such as C or C++ (or even Java). It is tightly tied to the machine hardware and operating system, but as a result, runs much faster than an interpreted language. The tradeoff is that a binary program is nonportable, while an interpreted script such as PHP is quite portable. To further muddy the waters, some languages like Java "compile" to a "bytecode" which is more or less machine independent (i.e., portable), and so needs an interpreter on the target machine to actually run. The upside is that 1) it's harder to steal your code, and 2) it's still faster than a flat text interpreted language.

So, to finally answer your question, PHP programs (pages) are scripts, but a script doesn't have to be PHP. Most Web applications such as stores (shopping carts), forums, and auction sites are written in PHP, but some are Perl or some other language. PHP just happens to be a scripting language that is optimized for producing web pages and is thus very popular, but it's not the only game in town. Using a scripting language (such as PHP) enables you to have all sorts of advanced features of a real programming language, enabling "dynamic" changeable pages, rather than a "static" .html or .htm page (where the content is fixed until you edit the file)*. And yes, you can write your Home Page in HTML or PHP. The default server setup is to look for specific page names and types (index.html, then index.htm, then index.php, then give up), but you could probably  build a Home Page in Perl called MyPage.pl and tweak your .htaccess file to have the server run it if a visitor just gives your domain name.

* More mud: an HTML page, however produced, can use JavaScript  code to give it some  dynamic capabilities (such as drop-down menus, images or buttons that change when you roll your mouse over them, and other effects). JS is tightly tied to HTML and does not stand by itself as a general purpose computer language.

You can use Dreamweaver, but I think it only produces HTML + CSS, not PHP. CSS is a separate animal, a file that fine tunes how your page (however it's produced) is presented  (font size, face, color; background color or image, margins and padding around things, etc.). You can run without CSS, with the browser's built-in default settings, or you can put most of the changed settings in the HTML, but using CSS is generally much cleaner.

CSS is not a template  per-se. It stands for Cascading Style Sheets. You can define a number of CSS "style sheets"; the "last one" to define some setting "wins". Your HTML code can also override the style sheets with its own "style" attributes, but that should be used sparingly. The general idea is to use CSS as much as possible to get consistent settings for presentation attributes across your entire site, with more customized style sheets for specific pages to override and fine tune settings, and even style= attributes in the HTML code to further override the settings. That's the "Cascading" in CSS.

Many page editors and site builders (e.g., Dreamweaver) have "templates" which can give you a head start in laying out your page. These templates are a mixture of HTML tags to use and CSS style sheet settings to use to affect the presentation style.

Thoroughly confused now?

CSS sets display attributes: font typeface, size, color; background color or image; margins and padding around elements; widths and heights of certain things -- stuff like that. You still need HTML to show where a paragraph starts and ends, what's a header, what text is in a list of what kind, etc. You can set attributes for all uses of a tag (or even larger groups, such as the page body), or for defined "classes" of things (e.g., <ul class="myspeciallist">) or even individual "id'd" items (e.g., <div id="myspecialdiv">).

When someone says, "Build your CSS, and then just use HTML to input the text/content," they are saying, "the HTML will contain the content  (information) and basic structure  (paragraphs, headings, lists, etc.). The CSS will define how the text and other things are presented. Change one CSS style file, and you can have a completely different looking page (but the same content). The idea is to separate the content from the markup details (presentation). You say in the HTML, "this is an unordered list, and here are the individual items within it." You don't give all the fine details of the presentation (size, spacing, font, etc.) all mixed in with the textual content. Instead, that stuff goes in the CSS. As a bonus, you can use that CSS style file (style sheet) unchanged for another page, saving labor and giving your site a unified look.

It doesn't really matter which you do first -- the HTML or the CSS. If you're happy with the default presentation that browsers give you, you can do HTML without any  CSS. If you need to tune the presentation for a certain look, it's best to put that in a separate CSS style file, rather than mixing the formatting details in with the HTML. Or you can do the CSS first, if it makes you happy. Either way, you'll probably end up iterating several times through HTML/content and CSS/style changes until you've got the content you want being presented the way you want.

You can do that from within WordPress.  Just go to Settings > Reading

Then under Front page displays you can set a static page as the Front page.  Hope that helps!

 

Might be easier to manage, since then you could still do everything inside of WordPress.

You can with this plugin:

http://wp.uberdose.com/2007/03/24/all-in-one-seo-pack/

Should cover all your SEO needs.  I use it on all my projects to cover the search engine tweaks. 

Haha, anytime!    Nice to know all of this time I've spent with WordPress is paying off in one way or another.