The club's statement was very carefully worded, they have decided to go down the General Manager/First Team Coach route which seems sensible as players contracts are much more complicated these days. The emphasis on developing young players is a strategy with risks - the Bottom6 is relatively high level for young players to be introduced successfully IMO.
You can't ignore cost was a factor in choosing McLeish but it's more hopeful to think of him as the continuity candidate, i.e. someone who knows more about the club than an outside appointment, risky - sure but is there any other kind?. Three years might seem generous but I presume there are release clauses within the deal.
The only things left to say are good luck Craig and COYS!