Aims: Revealing the fragmentation, infall, and outflow processes in the immediate environment around massive young stellar objects is crucial for understanding the formation of the most massive stars. Methods: With this goal in mind we present the so far highest spatial-resolution thermal submm line and continuum observations toward the young high-mass protostar NGC7538 IRS1. Using the Plateau de Bure Interferometer in its most extended configuration at 843mum wavelength, we achieved a spatial resolution of 0.2"x0.17", corresponding to ~500AU at a distance of 2.7\,kpc. Results: For the first time, we have observed the fragmentation of the dense inner core of this region with at least three subsources within the inner 3000 AU. The outflow exhibits blue- and red-shifted emission on both sides of the central source indicating that the current orientation has to be close to the line-of-sight, which differs from other recent models. We observe rotational signatures in northeast-southwest direction; however, even on scales of 500 AU, we do not identify any Keplerian rotation signatures. This implies that during the early evolutionary stages any stable Keplerian inner disk has to be very small (<=500 AU). The high-energy line HCN(4-3)v2=1 (E_u/k=1050K) is detected over an extent of approximately 3000 AU. In addition to this, the detection of red-shifted absorption from this line toward the central dust continuum peak position allows us to estimate infall rates of ~1.8x10^(-3)Msun/yr on the smallest spatial scales. Although all that gas will not necessarily be accreted onto the central protostar, nevertheless, such inner core infall rates are among the best proxies of the actual accretion rates one can derive during the early embedded star formation phase. These data are consistent with collapse simulations and the observed high multiplicity of massive stars.