How is a Party (Legal Entity or an Account) identified in DAML? Can DAML handle multiple accounts on a single Blockchain node?

A Party in Daml can represent a legal entity, person or a service

On the 2nd part, A participant node can host multiple parties, though how do party/participant node(s) interact (if at all) on the underlying Blockchain in a Domain?

The parties don’t interact with the underlying domain. The Daml transactions are exchanged between the participants and the domain only operates on the “participant” level. Therefore, a domain does not know about the parties involved in a transaction.

I hope this helps!