Many subversion repositories have a trunk subdirectory under the root of the repository.
Is the trunk directory in svn simply a directory with a name that follows a convention, or does the name trunk have special meaning hard-coded into subversion?
Yes, having a trunk directory is simply a convention and is treated just like any other directory. You can have a Subversion repository without a trunk, and you can do your daily development work out of a directory with a different name.