PhpStorm displays the folder structure in a classical way:
Project
----Folder1
--------Subfolder1
------------Subsubfolder1
----------------FilenameIActuallyCareFor.php
What I usually see is
Project
----Folder1
--------Subfolder1
------------Subsubfol
----------------Filen
unless I expend that window to a size that I hardly see my code. Is there a way to reduce that indention?
AFAIK it's GUI Theme (a.k.a. Look&Feel in Java apps) dependent .. so should be "No". You may try another GUI Theme though.
In any case: https://youtrack.jetbrains.com/issue/IDEA-158781 -- watch that and related tickets (star/vote/comment) to get notified on any progress.
As a possible alternative -- try using Navigation Bar (the one under Main menu) -- it allows you to see where the currently selected/active file is located as well as allows to navigate through the project/file structure (other folders) and open files straight from there etc.