Hey!! I know that this question is like 5 years old but I just really wanted to share my method as I am one of the only people I know that organizes music like this!
First, I have a master playlist. This playlist has everything and anything I listen to on it. It has single songs but also whole albums and everything in between. This is a really good thing for me because it allows me to be able to listen to any song I like at any time, as they're all in the same place!
Next, I have individual playlists filled with songs that I'm currently listening to. I get bored of songs very quickly so rather than delete playlists I just make new ones with the songs that I'm currently interested in hearing. By the end of the year, I end up with anywhere from 8-24 playlists, and the way I organize these is by putting them in a yearly folder. Every once and a while I like to go back to these playlists and listen to them as they remind me of the specific time when I would listen to those specific songs. I also usually privatize these playlists when I'm no longer listening to them.
Finally, I have playlists for moods. This is for specific collections of music like sad music, nostalgic music, or anything you want. The possibilities are endless!
If you want to check my account out and see what I'm talking about, my Spotify username is adeliamhayes . Hope this helps someone!