This Reddit post will give you a good high level overview, and has links if you want to explore further.
https://www.reddit.com/r/kobo/comments/18yizux/i_finally_cav...
Here's a detailed guide on how to use Tags in Calibre to set up Collections on Kobo. This was the primary reason I bought a Kobo this year. I have over 1k books. They were mostly unsorted on Kindle. Amazon wouldn't let me use Calibre to organize them, and I didn't want to organize them on the device with its slow interface. With Calibre, I just got everything tagged and they were instantly organized upon upload to the Kobo.
https://www.reddit.com/r/kobo/comments/qlgha1/how_to_create_...
If you end up getting a Kobo, make sure you set up the Calibre Kobo plugin to auto convert every book to the kepub format. Just makes things smoother on the ereader and the plugin does it intelligently. Only sending the kepub to the device but preserves disk space by keeping the books on your desktop in their original format. The first link I mentioned links out to a guide on that.
