I installed QuickPic app to use instead of Gallery just beacuse of the sorting/organizing options. I don't remember now what it was that wanted done but couldn't do in Gallery but could easily do in QuickPic, but I've never looked back...
I don't know if what you want done is a seasily fixed, but check it out and try anyway!
Edit: I copied a folder with subfolders to my HD+ just t try, and QuickPic shows the subfolders. I think that is what you wanted?
I've got a bit more time now and just wanted to add that with QickPic (and probably other gallery apps as well) you have a lot more setting you can use, should you want to. You can tell it where to look for pictures, or where to NOT look for pictures if the defaults aren't good for you. You also have ore options on how to display content.
If these settings are available in the stock Gallery app, I sure wasn't able to find them! And when I can't find things easily I look for a more user friendly alternative. QuickPic is what I happened to choose, but I'm sure there are other ones that does the job just as well.