That is a really good idea and it works perfectly!.
Below is a .bat file i wrote that will create a {folder}.zip file for every subfolder.
If you create a text file and copy the code below into is and then rename it to buildZips.bat file.
Then when you add games through mame-ao it will add the game in a sub folder. Simply rerun the buildZips.bat and it will create a matching .zip
If you set that folder as a rom source in launchbox then it will automatically recognize the new game.
It is exactly what i was hoping for
buildZips.bat
I might make a windows service to automate it, but as of now this works great.