Andrew:
It sounds like you already understand perfectly the basic requirement of not crossing the "top level" folders in the data model. But once you dive into one of those top level folders, you may combine elements from the various subdirectories.
Thus, you may select Issues application data and throw it onto a report with the associated Project Names by staying within the top level "Project Information" folder. The "Project Information" folder contains an "Applications" subdirectory, which contains an "Issues" folder.

This is a best practice, and should yield reliable results.