The ‘master’ convention isn’t mandatory. Its only advantage is that it allows you to run a build from a subproject directory, just like when using a hierarchical directory layout. If you put ‘settings.gradle’ into a different directory, command line builds will have have to be run from that directory (but can still execute selected subproject tasks).
Dependencies might be a path of less resistance then.
Not sure what you mean by that.
PS: With the Gradle Eclipse tooling, hierarchical project directory layouts work just fine in Eclipse.