Hierarchical structure design and usability

I created a website for learning languages with flashcard method. The website itself is http://www.vocableman.com

The problem I have run into is that users are complaining that they have problems with understanding the functions and the main cause is propably the hieararchical structure I use in the Cards and folders section (you can see a simplier version in the Public folders section after clicking on one of the folders), which introduces the users ability to create folders and subfolders that contain individual learning flashcards.

Is there a way to create/design/imitate this tree-like structure easier to use and understand for users and maybe also easier to use on touch devices (the tree structure is quite hard to use, because the active regions for collapsing and expanding items is quite small)?

UPDATE: What other improvements of the usability of the site itself can you recommend?