For capacity reasons my iPhoto library is on an external drive. I would now like to process the photos on that drive with LR 5.7 (and leave them on that drive), but cannot find the correct folder using the LR import screen. I believe I have to create link (using packages or something like this) and put it on my desktop, from where the link can be found by LR. However, I am not sure how to do this.
Please show us a screen shot of the Finder window showing the external drive and the folder or folders you think your iPhoto images are in.
By default iPhoto stores images in your User Name folder, in the Pictures subfolder and in a Package folder (Package folder = many subfolders inside of it that are hidden from view to the user) and then in a folder called Masters.
You would of had to manually changed that location in the iPhoto preferences when you first starting using iPhoto. Did you do that?