When things work until they don’t (or why I need to rethink how I am organising my genealogy files)

My system works pretty well. Most of the time. But with the more information I collect on collateral lines and associated individuals it is getting a little unwieldy. I don’t want to throw the baby out with the bath water. I like my system. But it needs rejigging and perhaps some compromising as to the creation of sub-folders. I’m not a fan of having too many sub-folders.

This is my primary genealogy folder, the hold all if you will. 
Files are organised into family lines – my maternal grandfather and grandmother, my paternal grandfather and grandmother, my other half’s maternal and paternal lines – I use folder colorizer as an immediate visual aid and an underscore to keep them at the top. The TBS file is kind of embarrasing, shorthand for To Be Sorted. The stuff I have been lazy about filing correctly. The Excel files are the lists of books from the State Library, and various uni and local libraries; and State Record NSW files that I want to follow up on my next genealogy outings. Pretty straight forward so far.
But this is where it is getting messy. 

I like keeping individuals as individuals, so folder convention is in general :
You can tell my direct ancestors at a glance because, yep folder colorizer again. I do have general folders too: !Surname,  Associated Names and yes a TBS folder. The insides of individual folders looks like this:
Ignoring the Trove docs I haven’t renamed yet my naming convention is : 
This is Nip Sinclair’s folder but you can see a few non-Nip files. One is his first wife and two pertain to Obituaries he is mentioned in, and Sinclair&Co is of course his business dealings. I feel a certain amount of guilt at having Hilda only as a subset of Nip. It offends my Feminist principles. But creating folders for every individual is my getting overwhelming.
I cannot always remember who belongs to who family wise or if they are even related. I like knowing about associated people, I like outlining relationships. But how do I do this in such a hierarchical folder structure? 
I like my system for its focus on individuals, chronological sorting within individuals, and the ease of searching…when I know what or who I am looking for, but I can’t help feeling that the more people I add the less it will work and I am going to have to submit to sub-folders. I just don’t know how. 

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