When you choose not to flatten the structure, for some reasone pack and go will include all folders right back to the root directory.
So if the top-level SLDASM file is in D:\Projects\123-456\SolidWorks, you will get all of these folders recreated in the zip or moved directory.
It is safe to remove the folders above the top-level SLDASM files - in this case you only need to maintain the contents of the SolidWorks folders and can ignore or remove the Projects and 123-456 folders.
Alternatively, when you Pack and Go, in the main window you can double-click in the cell listing each file's Save To Folder cell and specify a new directory. Using the Select/Replace button will also save you a bunch of time. So you can choose to flatten, which removes the higher level folders, but then recreate the sub-folder structure, or move or rename files or folders all in one go.
Thanks for your resonse-- good to know I can remove some of those unnecessary folders.
A good tip with the Pack and Go, too, however I found that the Select/Replace button is disabled when I am editing the Save to Folder cell.