Hi Yash,
Yes, it applies to existing folder structures too. Setting up a project can be a tedious process. But, once you know the concept and how it works, it is 5 minutes well spent. Inventor Project consists of three major areas: Workspace, Library, and other options and file paths. Workspace is where the model files (iam, ipt, ipn, idw/dwg) live. It is like a cone. Under the Workspace, you can create sub folders. When the given project is active, Inventor will look for files within the Workspace. This helps you move data from one machine to another easily. Also, it help make data management possible.
The second important area of a project is Library. These folders contain files you don't want to modify. They are like books in a library. You can reference it in your project but you cannot change them. They are well-defined previously already.
Other options and file paths help you set up where \Design Data\ settings, Content Center files, and template files are stored. Once you set up a project file, you are ready to create models.
It is a misconception that Inventor project file is hard to use and hard to understand. For small-size projects, one can get by without using a project file. However, if you are designing mid to large size assemblies and your organization is more than just you, you have to use a project file to manage your data. Please let us know if you have additional questions.
Many thanks!
Johnson Shiue (johnson.shiue@autodesk.com)
Software Test Engineer