That's one of its main uses. One thing it does not do (or I don't know how) and graphviz does, though, is arranging nodes intelligently so as to minimize clutter and edge distances. That's one of the nice things in graphviz.
That's exactly what "graph drawing" means [0]. Can tikz choose the position of the vertices itself or you have to specify the positions yourself? If it is you who chooses the positions, then tikz does not do "graph drawing".
And thankfully LuaLaTex was ready enough at that time, I can't imagine how bad it would've been to do this in pure Tex ...
Really cool project though, one of the few that made it outside of uni.
It's described in part IV of the pgf manual.