Is this supposed to happen? I remember in Oblivion it did, but I don't recall this happening with Skyrim.

I've checked all of my quests for aliases that may have packages on them, and I've checked the NPCs themselves. There are no packages to be found, but still they are eating, and sleeping. I've tried running the quest from the start with a save that the mod has never been loaded in but it still happens. In the past I've had results with completely new saves but I really don't want to have to do that...

My question is... why is this happening? It's screwing up a scene I've been trying to get working for weeks where it won't start because they are too busy trying to perform AI packages that just don't exist.

I don't know why they do that, I've never experienced it myself. But couldn't you just give them some packages that prevents these eating/sleeping habits?

Yes, they are using the default packages that all npc, except maybe some of them, have. See the "Default Package list" scrolling menus on the AI Packages tab.

As for your other question regarding npc leaving the place where you moved them, all npcs belong to a precise location; I wouldn't be surprised that, when you move them from that location and you don't add packages in order to keep them busy in their new place, they simply want to go home. Just an idea I had at work.