The iMovie library "Show Package Contents" folder (that appears when you Control-click on the library's icon in the Finder) contains project folders for each project that in turn contain the Original Media, temporary render files, codes, and other data that comprise each project. They cannot be played in the Show Package Contents. view. In order to play the projects one must click on the project from within the iMovie app. The iMovie app will then refer to the appropriate project folder in the iMovie Library Show Package Contents and assemble the data into a playable and editable project. All of the original media in the projects is contained in the iMovie library, not the iMovie app. The iMovie app contains only editing thumb nails that refer to the original media in the iMovie library. So if the iMovie library becomes corrupted or deleted, you will lose all of the project media and there will be no projects to which the iMovie app can refer. In other words, everything would be gone unless backed up elsewhere, such as in a Time Machine backup.
-- Rich