There is no filesystem (hence no file) on a BIOS boot partition. That concept is unknown to the BIOS. Your BIOS boot partition only has GRUB's stage 1.5 code, which includes drivers to read all the popular filesystems. In this way stage 2 can be in regular files in /boot/grub, kernel images can be loaded by their paths, etc.

'grub-install' has not had a --root-directory option since GRUB 1.99. It still has a --boot-directory option though. It specifies, well, the boot directory, i.e., /boot by default. It is useful when installing from a live system (otherwise 'grub-install' will consider the /boot of the live system).

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