Putting "Lightroom" in the subject and I'm bound to find it.
I understand the importance of a well though-out hierarchy of descriptive folder names. However, in a Lightroom environment, one is unnecessarily duplicating their work-effort by maintaining a folder hierarchy rather than a Collection hierarchy entirely within LR.
The LR collections are virtual and flexible. You can store one image in multiple collections, something you cannot do in OS-level folders without creating duplicate physical files. You can drag collections around and / or rename (or remove) collections with no impact on the enclosed images.
Personally, I don't even display the Folder structure on my LR desktop. In the Library Mode, I display only the Catalog and Collections. Every once in a while, I need to deal with a Folder issue or question, where I ask LR to show me the folder location in the Library rather than the file via Explore. When this investigation is done, I just remove the folder list again from my display. I use the Previous Import collection in the Catalog to identify images, not their source folder. I also use the shooting date and / or other EXIF data to identify / filter WIP images rather than their source folder.
Your questions injected 'catalogs'. Hopefully, this was a typo and you meant 'collections' in all the questions. I use simply folders based on dates, organized by years and then simply folder names like "YYYYMMDD <Description>" within all these higher-level annual folder, such as 2020 > 2020_RAW > 20200409 Buttermilk Biscuits. For the three keeper images from yesterday's baking, the images can be stored in two completely unrelated collections: Chicago and Food Porn. The images have 10 keywords each based on ways I'd like to search for them in the future, keywords related to location, camera, and recipe. It's much quicker to use the virtual organization inside LR than to attempt to encode all this same data into a folder structure. The search tools / filters are
much more powerful inside LR as compared to any form of OS-based search tools on the folders and files.
You mention being unsure of LR managing your folders. I'm not so hesitant, but still, I do 99% of my folder maintenance external to LR. That is, I copy images into my harddrive external to LR placing the images into their permanent location, then just Adding via the Import from that permanent location. Using the simple date-based organization, I am rarely presented with a need to rename or move any of these permanent folder locations. So, I'm not presented with a risk or need for LR to move or otherwise manage my physical folders.
Regarding collections and the cloud, this is a transfer mechanism where you update the 'sync' attribute of the Collection in LR classic and LR will keep the images in this Collection synced with files in the cloud. Although you can purchase a large storage space in the cloud, the basic size is really only large enough to sync specific WIP images from your mobile device with your primary desktop where LR Classic resides. So 'yes', using collections makes syncing effective and efficient with the Cloud and your mobile device, but you need to consider which and why images / collections are being synced with the cloud and a mobile device. Are you sending images from the field back to Classic? Are you syncing a specific group of images to your mobile device for remote work or sharing? The Cloud, in Adobe's pricing, is not very cost-effective for long-term mass storage.