Cipher,
First of all I am sorry for posting such a vague answer. Portal Aliases are used to tell DotNetNuke what URL's map to each portal. They can be set via the "Site Settings" section, under the "Admin" menu when you are logged in as host.
The other statements you have heard are somewhat correct. It is a bit of a pain to move an install from a subfolder to the root, but it is NOT impossible, nor all that hard, you just have to dot all of the i's and cross all of the t's. I have moved hundreds of DNN installations in many, many environments and have yet to have one that didn't move successfully.
It does sound like your hosting provider is adding many levels of complication to your porcess as well. I'm always sorry to see someone leave in the rearview mirror due to installation issues, however, I can understand your frustration. However, what I can tell you is that NO MATTER WHAT system you select, you will have technical hurdles to overcome. Setting up and configuring a dynamic, database driven website requires a certain level of complexity that CANNOT be overcome.
I wish you the best of luck, if you ever need any assistance or would like to try DNN again, we will be here!
EDIT: to correct name