It's a little different; in our solar system, the Sun is one of the foci of the ellipse, whereas in a binary system that focus would instead be the center of gravity between the two stars.
Yes, though in this case the big star weighs nearly 4x as much as the little star, so it's a matter of one star shuffling around in a small ellipse with the smaller star in orbit, rather than a more intimate orbital dance if the stars had been closer in mass.
We still have an analogy in the Solar system, Hydra and Nix orbit the Pluto-Charon binary.
The barycenter of the Pluto system is outside the surface of the dwarf planet.
Although Mercury in this instance is extremely insignificant, technically the earth orbits the center of gravity of the Sun and Mercury. Actually, the center of gravity of the Solar system as a whole, but I'm just going along with the GP.
