You're right in that $\frac{1+y}{p_x}=\frac{x}{p_y}$. This implies that $yp_y=xp_x-p_y$, and using this in the budget constraint $I=xp_x+yp_y$ yields
$ I =xp_x+xp_x-p_y=2xp_x-p_y$ or
$$x=\frac{I+p_y}{2p_x}.$$
In order to determine whether these goods are gross substitutes (or complements), you need to compute $\frac{\partial x}{\partial p_y}$ and observe that this is
$$\frac{\partial x}{\partial p_y}=\frac{1}{2p_x}>0.$$
This means that increases in the price of $y$ are associated with increases in the consumption of $x$, a behaviour that corresponds to gross substitutes.
As for whether $x$ is a normal good, you need to determine if increases in income are associated with increases or decreases in its consumption, so we calculate
$$\frac{\partial x}{\partial I}=\frac{1}{2p_x}>0.$$
As consumption of $x$ increases with $I$, we say that $x$ is a normal good (has positive income elasticity).