Unfamiliarity with the law can be the biggest downfall for those individuals who are undocumented. For example, it is a common misconception that people have the right to apply for their green card based on the fact that they have lived in the United States for 10 years. Unfortunately, there is no such law in existence today that allows for someone to obtain legal status based on that fact alone.
The only time that the physical presence is important is when an individual is already in removal proceedings, i.e. deportation, and is applying for the relief of cancellation of removal.