Recently active topics in Google tagged with folders

I think it would be helpful if we could color-code feeds and folders in Google Reader. For example, I could make all feeds inside my Local News folder green, my Facebook feed red, and everything else would stay the default white/blue color. This would help me find what I want now. Obviously everything I keep in Google Reader is important to me, but maybe right now I am just looking for local news. Color-coding seems to be just the thing facilitate this at just a glance.

I's like to have the possibility to group all my tags in a folder so as not to have them take up so much space in my sidebar. I'm currently using a lot of tags for organizing the posts I find interesting but I end up having a cluttered interface (See screenshot)


An option to put some or all tags in a folder (and thus only see them if I expand it) would be useful.