I've been running into a problem with my mods and cc. I like to make several folders, so I can easily know where all of my similar mods are. Lately, as I've gotten more, and needed more categories, mods and cc will not show up when installed. I realized it was because there is a limited depth of 4 (I think) files to go into. Frequently, I extract a file, and the file had folders in it already -- and my game won't read the content inside those files because it's too deeply nested in my mods folder.

Can I just add some lines in my resource.cfg to ask it to go deeper into the folders? Or is it limited for a good reason?

here is mine

Priority 500
PackedFile *.package
PackedFile */*.package
PackedFile */*/*.package
PackedFile */*/*/*.package
PackedFile */*/*/*/*.package
PackedFile */*/*/*/*/*.package

yes you can, it sets how deep (into folder hierarchies) the game looks for mods, specifically useful, if you want to organized your mods or, have mods that need to be in multiple folders. i dont think having many many many folder levels should affect your game that much that its even noticeable.