The halogen work lights are a common DIY substitute for more expensive photograhic "hot lights" (such as the Lowel Tota-Lite or the Ianiro RedHead) -- you can usually pick up a 250 or 500 watt fixture with bulbs for under $50 rather than spending hundreds on the "real deal". They're usually much lower temperature than photographic lights, but filters (with film) or a white balance adjustment (video or digital photography) will make up the difference.

The picture is not only high-key, but overexposed for effect. (The overexposure is absolutely not necessary for high key.) If we assume 2 250W lights and a one-and-a-half to two stop overexposure, 3 seconds is not a tremendously long exposure at a low ISO -- hot lights may seem ridiculously bright when you're looking at them, but they can't hold a proverbial candle to the sun or to a flash. The long exposure was probably made, as you assumed, for the etherial quality it lends the subject due to subtle motion.

As for high-key as a concept, it simply means that the majority of the tones in the image are lighter than mid-tone. An image can have a full tonal range and still be high-key, such as, say, a still life consisting of white objects on a white background with full-developed shadows, or a floral macro consisting of a wash of pinks against a light background, with accents of deeps reds and purples. It's just a matter of where the majority (usually the preponderance) of tones in the image lie on the tonal scale.