How can I create a sub-folder within my "Documents" folder?

Open your Documents folder in the Finder. Hit command-shift-N or choose New Folder from the Finder menu. You can simply drag existing documents into the new folder(s). You can also create folders within folders in the same way.

Also, you can add a New Folder button to the Finder's toolbar by opening Finder, going to the View menu in the menubar, selecting Customize Toolbar..., and dragging the New Folder icon to the toolbar in the Finder window. Then it's just one-click for new folders wherever you want them.