Does this schematic represent the fritzing circuit properly and can you explain how pulled low works in this IR sensor?
Figure 1. The internal circuit of the TSOP382xx.


  Also, since the IR Sensor pin 1 is pulled low when the sensor detects infrared light, does that simply mean that internally it gets "connected" to ground?


The 30k resistor "pulls-up" the output towards the positive supply when the output transistor is off. When the transistor turns on it offers a low resistance path between 1 and 2 ground. Your understanding is correct.


  Does that circuit properly represent the fritzing diagram?


Yes, but we can make it a little clearer.







simulate this circuit &ndash; Schematic created using CircuitLab

Figure 2. Redrawn schematic using the CircuitLab 'Custom Component'.

Notice that convention is to make the circuit read from left to right with current flow from top ('high' potential) to bottom ('low' potential). Even without the internal diagram of the TSOP device the experienced circuit reader would intuitively understand that the only way for the LED to light would be if the TSOP connected the LED cathode to ground.