It's not a stupid question at all and loads of people get caught by this.
Nearly all websites use web server software called Apache to run websites. Apache has certain default actions which is what you're seeing.
By default, Apache, unless it finds a default webpage will show a listing of all the files in the directory. When installed the default webpage Apache looks for and displays is index.html. Other web server software looks for home.htm. This applies to all directories on a website, even the main directory.
Take a look at http://brisray.com you'll see a page come up, even though you haven't specified one. That file displayed is index.htm - you can check this by going to http://brisray.com/index.html
When you go to a directory that doesn't have the default page in it then you'll see a directory listing as in http://brisray.com/test/
Apache and other web server software have configuration files. Most hosts do not let users anywhere near those, but it does have options to change the default values so you can change the default page to whatever you like, such as index.htm, index.php and so on. That list of alternative default pages also determines what order the software looks for them to display. If you have index.htm and index.html in the same directory then Apache will show whichever is first in the list.
Whether the web server shows the directory listing or not is also configurable, this is why some websites show a "You do not have permission to view these files" page.
As to why wbsites have folders it's for exactly the same reason you have folders on your local machine. It's a way of organizing the files to make administration easier. If you're just starting your website you may have just a couple of dozen files. After a while you may have several thousand.