Yes it should solve it. A similar discussion of this technique is here:
The situation is if you have a Web site say at localhost or any root level site, and you have mojoportal running as a Virtual Directory/application beneath it, if there is a Web.config file un the folder corresponding to localhost or the root site, it will by default pass settings down to the Virtual Directory/Applications beneath it. This technique is a way to overcome that problem. It should also help in reverse, if you have mojoportal running at the root and some other app as a Virtual Directory/Application beneath it.