What functionality is missing? What is unsatisfying with the current situation?

  It would be really helpful if images could be stored in 'folders' in the UI for the image storage. 

How does this feature request address the current situation?

  By allowing images to be put in folders, it means that images can be stored in a meaningful way (worlds, locations, characters, items, etc), making them easier to find.  If a folder structure could be implemented (i.e., a category list for images), then that would be even better.

What are other uses for this feature request?

It simply makes it easier to find images again.  All images can be put in containers for their specific use.