I don't want to use sub-domains, but would rather the set up be www.domain.com/1, www.domain.com/2 etc. I can do this with new wp installations for each - but I go through the home wp site, create a page name 1, then go to Cpanel and create the 1 folder with new setup of WP - this all works, but is this proper?
You have 2 recommended options. Use single installations for each /1, /2, /3 and a main installation as the home page.
Or just use the one database. As your site grows, if you need to add more resources to the database, you'll add extra database servers to handle the load but the data will still be in one database, you'll just use load-balancing technology to distribute the load.