I think you should go with backfield’s approach… beyond the folder structures, Plex offers a number of options to sort/filter the content of your libraries… that’s rather helpful if you want to be able to still find related content across those sections (e.g. pics with kid1 + kid2 from 2019-2021).
If that’s not cutting it for you and you want/need to organize things into different libraries…
There’s actually an existing feature suggestion discussing an option to group libraries in the sidebar into folders. I suggest you comment/vote in that thread in order to avoid distracting or cannibalizing votes.
Unless I’ve missed some unique aspect of your suggestion, I’ll close it as a duplicate.
