IIRC, Instrument Tracks were introduced in SONAR 8, which combine the MIDI and audio pieces into a single entity. This was added mainly in response to users of other DAWs who preferred that model. Personally, I much prefer the versatility and control of separate MIDI and audio tracks, and don't use instrument tracks at all.
The synth rack is just an alternate view of your synths, gathered into one place for convenience. Any action you initiate on a synth from there applies to track and console views as well. You can, however, remove a synth from a track without removing it from the synth rack, a useful feature.
If you think all this is unnecessarily complicated, it's only because you haven't had occasion to use all the features that are there yet. Trust me, treating MIDI and audio tracks as separate things is definitely the way to go.
I could also add that if you think this is all overly complicated, you probably never produced records in the pre-DAW age! :)