I don't see any option for adding chapters in i-movie 10.1 as there was in prior versions. How can I add chapters so I don't have an hour long movie with no ability to go to particular sections?
Apple removed the ability to create chapters starting with iMovie 10. Chapters are used with DVDs, Blu-ray's, and podcasts. I do my movie editing with previous versions of iMovie, (iMovie HD 06 and iMovie 11) or other movie editing programs. To my knowledge, the new iMovie is the ONLY movie editing program that cannot create chapters.
iDVD automatically recognizes the chapters set by earlier versions of iMovie. However, you can set chapters using, "toast", and continue using your current version of iMovie but that is not a workflow I follow.
Recommend that you use the link below and ask Apple to bring the chapter feature back. You will not receive a reply, but I know for a fact each one of these are read by Apple people.
http://www.apple.com/feedback/imovie.html