The pages you can edit in Pages > All Pages (or create in Pages > Add New) are static pages. A static page is just like a single post, only it sits outside the chronological structure of a blog. Your homepage is your blog front. It's a dynamic page (created on the fly), not a static one, so of course you cannot find it in Pages > All Pages. You don't "access" or "edit" a dynamic page, you tell it what to display. By default, your homepage displays your latest posts; as already explained, you can set it to display a static page instead.

So, if you want us to help you, start by answering my question please: when one lands on http://gosiasdrawer.wordpress.com/ , what exactly do you want them to see? Just your "hello friend" text?

Basically, my blog is supposed to have 4 pages, but it only has 3 that are directly editable in Pages> All pages. The one that I want to be my front page is the one missing. Therefore, I can't select it in Reading> Frnot page displays: a static page. My home page (ie desired front page) is a ghost page, an extra one that shows up online but which I haven't got an access to through my admin dashboard...

PS Now that you've added the custom menu you need to remove the Pages widget.

The homepage isn't a static page like those you can create or edit in Pages > All Pages. Homepage = main blog address = blog front. The blog front can display either your latest posts or a static page.

Posts aren't "transferred" anywhere: posts are displayed in a variety of ways, such as by date or by category. What exactly would you like to display where?

If you do not want all the posts to show on the front page of the blog which is the default setting that you can create and designate a static Page as the front page of your blog. If you do that then you also need to create and designate a running page for your posts.
http://en.support.wordpress.com/pages/
http://en.support.wordpress.com/pages/front-page/

my blog is:
http://gosiasdrawer.wordpress.com/

Just changed my theme and it appears that my home page doesn't really exist! What I mean is I have changed from a theme that had tabs to a theme in which I'm using page widget. And here's when the ghostly nature of my home page materialised: when I when into 'Pages' in my utility sidebar to assign order to my 3 pages (home, about, contact) so that they would follow that order when used in page widget it turned out that there are only about and contact pages there: home is nowhere to be found. As a result, my widget only enables switching between contact and about pages, making navigation through my blog difficult: once you navigate away from home page you cannot easilygo back to it. The only option is to click 'go back' browser button, which is a pain really. An interesting thing is that my other blog, which has been maintained in this theme from the start displays all theree pages in 'Pages' and there is no problem with page widget! I'm wondering whether its because my previous theme was faulty and did not display home page in 'Pages' (my previous theme was regulus and I've seen people complaining about the ghost home page on the forum)...
The only solution I can think of right now is acutally creating a brand new page called home and copying all the contents of the ghost page into it. But is it at all possible to copy entire's page content (all its posts) onto another page? How do you do that?

thanks