Q: Use my own folders as method of organizing.

You can use the folders in the app for organizing albums into related groups. Other than that, you will need to be clearer about what you are asking.

I'm still not clear what you mean by this. You can use any method or app you want to organize your photos, but if it is based on the file system & the metadata stored outside the photo files themselves, it will be forever tied to that file system.

Yes, you an use a reference library by unchecking this checkbox in Photos/General preference pane:

However, it's not generally recommended as that method is susceptible to the breaking of the links to the "source" files. 

By default Photos copies items into the Photos library. You can turn that off in Photos preferences so that it only references the original file stored elsewhere, but either way, it won't delete the original, wherever it is stored, unless you explicitly tell it to do that.

Photos internal organization is not based on where files are stored but mostly on the metadata stored within the files themselves. This follows the several standards in use by most third party photo editing & organizational apps, in part because it is "portable" across different hardware & file systems, & is (mostly) obsolescence proof. Because of this, you won't see your photos organized in the Photos app into the same folder structure as you would in (for example) Finder, but it does have its own folders to organize photos into sets of albums, which also are organizational structures unique to the app. Since a photo can be in more than one album, this is sort of like aliases in the file system, allowing for multiple organizational hierarchies.

Very simply - use iPhoto or Photos or Aperture to find them - that is what they do

Basically organizing by folders is an old fashioned and very limited way of organizing photos - them same has having a closet full of shoeboxes full of photos

If that is what you want to do then there is no reason to use Photos (or iPhoto or Aperture) as you are working against them rather than with them - use the finder to do you folder organization and Preview to look at photos

If I want to find all photos of my wife and my daughter in Italy I can do it in into in a second (not yet so sure about Photos) - with your Folders you would never be able to find them all

LN

First create a smart album with the criteria:

Next select a photo in the smart album and use this menu option

to be taken to the file via the Finder: