When you type in the DNS server name, it should pull up the default webpage, which by default is that CWP page.
I just checked mine, and that is what it does.
All domain created in CWP are done under /home/username, so I'm puzzled how it's showing /
CWP automatically creates a DNS zone when you change your DNS's.
I would leave it alone.
Also you should not create the hostname as a website or subdomain to a website.
It should only exist as an A record in that domain names DNS for rDNS checks.