I have the USB port under my seat in my 58 leon.
You CAN have more than 6 folders in total on a USB stick, you just can't have more than 6 top level folders, as these map to the 6 buttons on the radio / CD changer.
It's perfectly possible to have subfolders instead.
I have the following arrangement:
Folder 1: 1_playlist (misc songs)
Folder 2: Classic->Vivaldi
Folder 2: Classic-> 2001: ASO
Folder 2: Classic-> Rob Dougan
Folder 3: Dance->Misc songs
Folder 3: Dance->Chicane
Folder 3: Dance->Chicane->Far from the maddening crowds
Folder 3: Dance->Behind the sun
etc etc
Works pretty well on my 8GB flash drive, no need to unplug the drive
As has been pointed out, the only difficulties are not getting any track names/album names being displayed, and the fact that disc random isn't really random (it seems to shuffle it once, then starts at the front of that order everytime you put it back into random or turn the ignition off).
I concur with above.