Filter results by subcategory? Show all levels of a category together in one grid?

Hi. I have a series of interlocking questions - I'll try and be concise.

I'm putting together a showcase-style cart for a hat store. They have main categories like Ladies' Dress, Ladies' Casual, Men's Hats, Men's caps, etc. I'm trying to maintain these top-level categories while also sorting the hats into subcategories (cloche, pillbox, formal).

The "Filter results by..." is a promising option but A-Z or 0-9 isn't useful in this case. Can a popup menu indicate the subcategory instead? i.e. under Ladies' Dress hats it would say Filter Results By.... and the popup would show cloche, pillbox, or formal - the subcategories for that main category.

Additional wrinkle: I installed the plug-in to display products in a grid. But it doesn't kick in until I reach one of the subcategories. Is there a way to show every item under a main category, including all subcategories, in a grid? Then filter by subcategory if desired using the method described above?

If it's not easily done, I'll happily drop the subcategories and just stick with the broader main categories. But it would be nice to have the more precise viewing options...

Thanks!
adam