Okay well the new layout your trying contradicts the way you wanted it done in your first post but basically in Admin => Edit Categories you would set a category to NO THUMBS meaning you can not upload to it to be a top level parent only.
You can get rid of the text by editing the english.php language file and making the language string that says non indicated empty
As far as file deletion issues I would need more info and have to look at it. All your directories should be 777 unless something is preventing them from being set properly so I will have to see what I can find out on that.