Hello,
Magnatune allows me to download its artists albums in a zipped FLAC format, which is a perfect way for me to organize them - the only subfolder I need is the artist's name, and drop the ZIPs in them, and voila! no more co-mingling of songs and albums nor the hassle of subfolders for each album.
Foobar2000 handles these easily and transparently. However, it doesn't natively stream over the internet to its own Android app. The components it uses, however, are all FOSS, so it may be a matter of simply looking for archive files in the paths, and opening them to access the contained files. FLAC should also be an easy add-on as well, I believe.
Cheers,
Robert~