Thanks! It's working perfectly now!
Summary of what I did for newbies:
1. I loaded microcore with home and opt on my hard drive (i.e., home=hda1 opt=hda1)
2. I modified /opt/.filetool.lst so that it only held directories relevant passwords and config (etc/shadow, etc/dropbear, etc/passwd, or see above)
3. I sudo filetool.sh -b to back-up all the stuff in those folders.
4. I added the line 'filetool.sh -r' (without quotes) to /opt/bootlocal.sh . (Not sure if this step is entirely necessary, but my system works so woohoo!).
Thanks again for all the help.