Finally after banging head on google for hours, asking question on SO and SE's drupal and communicating with other users via comments, I cracked it...
Well, the directory structure is still debatable but satisfactory for me. But the answer to the most imp question is "DRUSH".
Refer this and this node from Drupal. Collectively, it has everything needed to answer my entire question.
I would also like to point you to this answer which has provided the first and most-imp hint to me.