Thanks again. Success so far.
I redid the mounting for the external hard drive and now have it mounted to the Retropie folder and it appears to work correctly. If I have the drive plugged in on boot, the emulators show up and games work. If I boot without the drive, only the Retropie menu comes up.
I did have to manually set up the BIOS, retropiemenu, roms, and splashscreens folders and subfolders up in the root of the hard drive through Windows. I assume that is normal in this case (and hopefully I did't miss anything).
I have a few more folder questions:
Is the BIOS folder set up in the same way as the rom folder in that there are subfolders for each emulator (such as psp, psx, sega32x) or do you just toss all the bios files in that folder?
I see that the images by default are located in /opt/retropie/configs/all/emulationstation/downloaded_images. Any suggestions on what to look at to store the images on the hard drive instead? Using Sselphs scraper perhaps?
Also, what triggers retropie to generate a new gamelist.xml? Is it when the scraper is run?