I have set up a Project Site with Libraries and Subsites. Is there a way to upload content in folders?

Just to be sure, your question is how do you upload document to a folder within your document library? 

Please correct me if this is not what you want

You will click the folder and click Upload button under File Ribbon action to upload content.

If you are using IE then you will be able to use Explorer View option under Library Ribbon action and then copy and paste your document and/or folders directly in to library.