What is the Home Folder under /Library/Java for?
No you didn't mess anything up.  My Java 7 is in the same location as yours.  The Home symlink will not mess you up.

BTW you can add this to your .bash_profile to set your java home environment variable

export JAVA_HOME=`/usr/libexec/java_home -v1.7 2&gt;/dev/null`