iPhoto conceals the photos locations. I would not expect a drag and drop to work due to Apple's shenanigans here.
You can use the new Aperture/iPhoto importer in LR 5.7.x or this much older method: Moving Your Images From iPhoto to Lightroom — Lightroom Secrets
Thanks! This will definitely be the MO for moving the rest of the library over. BUT, I'm still dealing with the bizarre case of the photos being present as previews in LR, but no longer stored in the iPhoto library, or anywhere else that I can find.