Nesting folders is one of the simplest, most common ways to organise files. For some bizarre reason, you cannot nest folders in the Apple Notes app on iOS. MacSparky points out that it's possible from the Mac app though.
In the Mac app, this works exactly as you'd expect. Open Apple Notes, then drag an existing folder on top of another to nest it inside. When you open up Apple Notes on iOS, the nested folder will be where it's supposed to be, even though you can't actually organise it that way on iOS.
Nesting Folder in Apple Notes [MacSparky]