I created a horizontal app but couldn't get past the intro graphic (to my home collection). I looked at the default layout and it looks as though it's portrait, even the app setting is horizontal. (See below). I can't seem to find out how to adjust to a horizontal layout. Am I missing an option somewhere?
You're not missing any options. The setting for establishing the app as horizontal is in the actual app settings - you got it right.
For now, the preview doesn't react to those settings. The preview is a rough guideline of how the grid works. The same grid will be responsive (will stretch / skew) to accommodate different devices & orientations, while maintaining the proportion (AR) of the cells (the main unit of the browse page).
If you are to publish content/layout in your app, the browse-page will render as expected (horizontally), despite this quick preview being showed in portrait only.