As for your question about categories, you may want to consider the differences between categories and tags:
http://en.support.wordpress.com/posts/categories-vs-tags/
Essentially categories organize your blog, and tags are for a wide variety of descriptions of posts.
http://en.support.wordpress.com/posts/categories/
http://en.support.wordpress.com/posts/tags/
Your categories are not acting like major topics which will then organize tags together into sub-topics but you can convert them:
http://en.support.wordpress.com/posts/categories/#converting-categories-to-tags