The Library tab for a catalog is broken up into three sections:
- Catalog Collection
- User Collections
What you are asking for is already there in the third section. Just look a bit further down :-).
If desired you can right click on "folders" and opt to have it show the entire hierarchy rather than just the names of the end folders. I prefer the default behavior because my folder names all have sufficient (abbreviated) information about year, category, and subject to stand alone, but if you use the directory tree for organizational cues then you may wish to show the hierarchy.
There are also albums, collections, and metadata filtering by which to organize your images abstractly (not directly related to their place on the hard drive).
If you haven't seen the YouTube series a lot of this is discussed at least briefly: http://www.youtube.com/playlist?list=PLDMRz3ssFQH6HhCcWLh7xL0SapRxUNzs9
And if you will be spending a lot of time organizing and editing your images in Capture One you may want to consider how much of your time/frustration could be saved by doing a formal training class in Capture One
whether in person or via the web.