Open up two Arrange Windows in a single screenset. Set one of them to contents link mode to show the contents of the folders. And set the other with Link mode off so that it always shows the top level of your Arrangement.
This way you can navigate your arrangement in one and see the contents of folders in the other. So basically, just click on the folder in one, and the folder tracks are displayed in the other. And then you can easily drag and drop from one Arrange Window to the other.