hmm, I just had a short look on this video. Honestly, it is a bit too fast for my slow eyes.
What I understood, that they do some modifications on the user home directories in order have ftp access more simple.
I would simply omit these usermod steps. So keep user 'pi' home dir in /home/pi, and you will need to spend a few more mouse clicks in your favorite ftp-client (to /var/www) when you transfer your web page.
It is needed, that the apache process can read the web files /var/www and the cgi-dirs. On my system, the apache process is running with user www-data .
And that you as either 'pi' or 'root' can read/write the files in order to manage the pages. And for security reasons, the apache user www-data should not have any rights to read/modify any files outside its realm /var/www and the cgi-directory.
Hope this helps.