You can use subdirectories as you indicate. I don't use Easy Populate so can't say anything about how that will work.

Be aware that, if you should want to use large images, you will have to structure them as
/images/baseball/product1.jpg
/images/basketball/product2.jpg
and
/images/large/baseball/product1_LRG.jpg
/images/large/basketball/product2_LRG.jpg
not
/images/baseball/large/product1_LRG.jpg
/images/basketball/large/product2_LRG.jpg