I noticed a .myPassword file in my home folder root. Is this supposed to be there? I ran "$ ls -a" in Terminal from my home directory and it listed a .myPassword file which contained my user account password. Is this file where the password is stored? It seems like it should not be that accessible.
This is not where your password is stored.  At least by the system, no way.  I don't have one there, which tells me you have a 3rd-party app that's doing this.  Take a close look.