====== How to paste my custom PHP code to index.php file ======

Let's assume you have found PHP code on the Internet, that is supposed to display some widget or HTML code when executed on the index.php page. And now you want to add this code to your Oxwall-powered website. Straightforward copy&paste implementation will not work here. Just like other modern CMS, Oxwall was developed based on the MVC programming model. That means that the application logic is separated from the representation logic (templates). Typically, the PHP code similar to the one you want to add to your page is taken from third-party resources, and already contains both logic and representation. And they must be separated, as mentioned above. 
So basically, you need to understand the algorithm of the PHP code you want to add, separate logics and representation, and then add each of the two components to the right place in the Oxwall code. 

- But does that mean I won't be able to add my simple PHP code that has been working fine for years on my other website? 

Actually, we could make it possible. But that would require sacrificing safe updates for sites, plugins and themes, and the plugin system as it is. 
Besides, you always have an option to use iframe in the Custom HTML/CSS widget.