I just delete the project folder. If you don't use per-project folders, this is just another reason to get re-organized. In your example, the folder called Songs, would have a folder called called XYZ which contains the cwp file(s) associated with XYZ and a folder called Audio which contains all the audio associated with the XYZ project. In other words:
\Songs toplevel folder containing all songs (aka projects)
\Songs\XYZ a project folder, contains XYZ.cwp, the autosaves, versions and possibly XYZ-tracking.cwp XYZ-mix1.cwp...XYZ-mixn.cwp and XYZ-final.cwp
\Songs\XYZ\Audio the audio files for XYZ
You can re-org your current setup by using "Save As" to build a proper directory tree of projects. BTW, it does not have to be as shallow as the example above. It is possible to create a tree as deep as you want, just make sure that the last folders are project folders with an audio subdir. For example: \Songs
\Songs\CD1
\Songs\CD1\Track1
\Songs\CD1\Track1\Audio
\Songs\CD1\Track2
\Songs\CD1\Track2\Audio
In this example Track 1 and 2 are the per-project folders for two tracks on CD1.