It would be extremely helpful if I could sort many locations into folders, but there doesn't seem to be any options for it. Any help is deeply appreciated.
You can put objects inside each other; that includes rooms. It's not uncommon to create rooms the player will never visit, and put other locations inside them for organisation purposes. This also allows you to use an expression like
if (Contains (house, game.pov)) to test if the player is in any of the locations inside a particular area.