This is down to two possible reasons:
File metadata, and headunit software.
In the stock head unit (9Gen), By default, It gives folder lists like you mention. There is no method I am aware of for browsing by album, artist, genre, etc.
However, When using JetAudio, a 3rd party app I installed, It generates a library where I can choose album by album etc, without regard for the underlying file structure.
To ensure your media files are tagged with the correct metadata, you can use standard windows explorer:
Or, Right click -> Properties -> Details Tab:
If all of the relevant information is in the relevant fields here, your metadata / files are fine, and it is simply down to the software in use on the head unit. If you can install a 3rd Party app, like Jet audio, you can have the best of both worlds.
I think in part, the use of a file structure browser is to prevent the need to generate a local media library on the device; when using Jet Audio I'll be up the road before it has discovered and listed all the albums on my USB drive.
If you are missing the relevant metadata, or have some files that are, you can quite easily add it - Personally, I've found MP3Tag
to be the easiest way to do this; It's certainly worthwhile, especially if you have a diverse library of music.
Hopefully that's of some help