No - they mean the 7th fret 
This tuning is good for simple melodies and no chording - like "O sole mio"... And if you play chords, they should be only fifths (and that is no chord and is sounding boring after the second song).
What I'm thinking of is that a good idea might be if you have a minor and a major chord in open tuning - for example (from low to high) G H D F#. The advantages are at least three - the low three strings are a major chord, the high three are a minor chord and the scales are played in three frets:
A major:
------------------------2---3-
----------------2---4--------
--------2---3----------------
-2--4------------------------
A H C# D E F# G# A
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