I suspect the reason Albumwrap didn't recognise them is b/c of the mp3 format. Albumwrap hasn't been updated in a few years.
I have a better solution, why not get iTunes. It will arrange your entire music library by artist & then their albums within those folders. iTunes physically creates folders for each artist & album. Then within LW, if you share that iTunes library then you'll see them listed in artist>album. Example below. iTunes:
Apple - iTunes - Download iTunes (it's FREE)
By zipping I meant just to put the songs into a folder & zip it using winzip or another program that zips or winrar. It won't reduce the size much if at all though.