The folders that got recreated are probably image folders, so you need to edit them back to a portable value. When I moved my install my old location had folders being remade too. So for example, I had F:\LaunchBox\Images\SNES, when a relative path should have just been Images\SNES. I had to edit my XML because I also moved my entire Emulator folder from one drive to another bigger drive. So I had to edit off the Drive letter (F:\Emulators to S:\Emulators, so everything was right), and change the image path from an absolute path to a relative path. Notepad++ will work well with the Ctrl + F function. There is a Find and Replace all option. Or you can edit the image paths in LaunchBox under edit platform, but this has to be done 1 at a time. You can see the path it's using in here.
Otherwise, I think you're losing performance because it's on your OS drive. This is just a guess, but unless that's an SSD there is probably not enough read / write speed OR LaunchBox and BigBox are currently still caching and it might be taking forever because of the drive. If you have a different, non-internal Hard Drive or even a USB3 external I would try putting LaunchBox there.
Even if you edit the paths first, then move it, as long as you make the paths relative instead of absolute, then it wont matter and it should work right away.