You would need to change your command to: rclone copy "/Users/username/VirtualBox VMs" "/Volumes/frn03-backup/VirtualBox VMs" -P
(note the change to the destination folder).
This might seems strange to you, but from a syntaxt perspective this is very logical. rclone will always work on the contents of whatever locations you specify and is consistent about doing this, so it should make sense after a bit of use
Yes.
rclone work with files like Cloudsystems, and on those systems a folder is not an "item" really, but just more of a consequence of where files exist, sso rclone will create any missing folders to make the destination path you specified be valid.
None, as far as I know.
It is not needed to mount.
The purpose is mainly if you want to set non-standard options for a local remote, because to set options you need a remote config to put them in. This is usually not needed - but if you want to specify how rclone should deal with for example symlinks then it can be useful. Read in the Union remote documentation to see what options are there.