Setting up /overlay on usb drive

First of all you are putting coding info in basic text which makes it harder to read. You should use the </> icon to put shell output.

Moving on to your problem, I dont understand why /dev/root is mounted to /rom/rom it should be /rom. I think you may have mixed up the copying directories. I suggest you to reset the device to OpenWrt defaults and then use the above link as suggested by @vgaetera to properly configure ExtRoot on your device. Btw which device are you using?