[Ahouroushi]

Kovid, the Cruz runs Android and therefore supports multiple different apps, the default app is Kobo which doesn't support externally introduced books(e.g. anything not from their store) at all, so most people use something else.
I personally use FBReader and it puts the books in 'Books', so that's where i default to, but some people use the Kindle app, and it defaults to another folder (I'll look into it and get back to you).
The output profile is because I sometimes use my Cruz for reading manga or comics, so i want to make the best use of screen real estate, while minimizing the file size, so having Calibre resize the images is the easiest way.
As for supporting subfolders, FBReader does and can even use them to help fill in missing metadata, the Kindle app doesn't, I don't think, but then i haven't tried it in awhile, so again, I'll look into it.

As for formats, FBReader supports:
['epub', 'pdb', 'txt', 'html', 'prc', 'mobi', 'fb2']
and the Kindle app supports:
['azw', 'azw1', 'azw4', 'mobi', 'prc']
(to the best of my knowledge)

And besides all of this, there are about 5-6 different models of 'Cruz', but I'm fairly certain that most of those using Calibre will be using the 'R101', (the 'Reader') as opposed to one of the T10x or T30x models(the 'Tablets').

Edit: The Kindle app is hardcoded to the 'kindle' folder and doesn't support subfolders, (except for it's 'covers' folder).