I think the philosophy is “don’t worry about the file system”, which works if you only live in Obsidian, but I use files both in and out of Obsidian, so finding them in the file system is important. Also, if you use Obsidian to be the sole organizer, it cuts across the grain of the “no lock-in” allure for which it brings (doesn’t it?).
Having used a filesystem to organize for over35 years, I’m finding it hard to make the change and frustrated all the while trying to run a hybrid model.
I used to use file folders to organize all my notes too. It felt good to have all of one kind of note in the same directory. But I found that approach had two serious drawbacks for me when managing the content:
A note could only be in one folder. If I organize my folders by topic, then I have to pick which folder a given note is in, and then hope I remember which folder to find it in later. Navigating the file system to look for a note that’s not where I thought it was is maddening.
Refactoring my notes was very painful. As my body of notes grows and matures, my old ways of thinking about them don’t fit anymore. But reorganizing folder-based notes is a pain; both dragging and dropping through a file explorer and going to the command line for batch operations is tedious, high-friction work that makes me not want to do it.
Now I have only a few folders. My file structure looks like this:
Inbox: All new notes are created here. I review this folder regularly, and either delete notes I don’t need or move them to the Notes folder.
Notes: All permanent notes live here.
Templates: Template notes go here, such as my daily notes, project and meeting templates, and so forth.
Files: Attachments go here; images, PDFs, etc.
That’s it. Just four folders. I don’t have any subfolders underneath them.
To organize my notes I use what I call “Topic” notes (Others in this community sometimes call them index notes or Maps of Content (MOCs)). Each Topic note acts like a virtual file folder and links to the notes contained in it. In my system, topic note names start with a “+” followed by a unique number so that they sort to the top and are in a meaningful order.
One nice feature of this system is that a note can be in multiple folders at once, so I can much more easily find what I’m looking for. Many topics can link to the same note and provide context for each relationship. Another feature is that refactoring is simple; editing a few topic pages is much faster than moving hundreds of files.
I hope this helps. If this approach interests you, there are lots of resources on this forum and elsewhere describing topic-based organization, and I’m happy to dive deeper as well.