How to structure graph by folder structure?

Hi, just started trying out Obsidian so this might be an obvious or incorrect use but I can’t seem to find it yet.
I used to use OneNote so I was happy I could import everything from there.
The only problem is that my Graph View now is just a cloud of a couple of linked files and otherwise many orphaned nodes.

What I’m trying to do

In OneNote my organization was based mostly on the “subgroups”/“file structure”.
Is it possible to either make automatic groups based on the folder structure?
Or, is possible to (automatically) add links between all nodes based on folder structure?

Things I have tried

I’ve looked into how to create links but with the limited ways I could glean from it it didn’t seem possible. The groups and filters seem promising but I wasn’t able to figure out a way to do it.

You could make nodes appear in different colors by opening the Graph view settings and add a New Group where you define a unique color for notes in a specific folder by selecting path: and selecting the folder you want to highlight.