Essentially, yes. And depending on what major leaguers you look it, it is what I tend to see. I would like to promote more of a focus of 90 degrees with the angle of your back, but there are guys that very on this part of mechanics. I have found that when my external rotation is at its max potential, the rest of my mechanics are where I want them to be.
I will address the rest of your questions in two ways. ROM can refer to both static and dynamic ROM. A good way to tell the differences is the simple lift your leg straight out and up slowly and control. You will probably only be able to get parallel to the ground or a little past it depending on how flexible you are. If you kick your leg up, you should be able to get it much higher.
This same principal applies to the ROM questions you are asking. Dynamically your arm should be able to external rotate(lay/flop back means the same as this) at around 90 degrees to your back and be nearly or completely parallel to flat ground.Statically, it will be much less and what it is statically is much less important since throwing is a dynamic activity.
I believe the medicine ball helps with arm action and external rotation is that it helps you to feel external rotation and feel your arm laying back. I have also found that is shows what my personal max possible external rotation is.
Your ROM doesn't need to increase, I believe that an athlete who throws on a consistent basis, the potential for a good amount of external rotation is possible. I don't want to advoacte just increasing the ROM, but the increase the fluidty and connection of all your mechanics. You can't force ER when you pitch at full speed, believe me I know. It occurs when efficient mechanics are present.
It's a result of good mechanics.
Am I making sense?
I'd love to answer any more questions you have. I'm not expert, but I have improved this area of my mechanics, and my mechanics in general pretty drastically. So I know how the process and how to work on it, since I have for over 2 years now.
This is kind of external rotation that has been my goal to achieve for a while. Both of these guys have great mechanics and gives them a great deal of external rotation.
http://www.youtube.com/watch?v=1bngdezfmO4