Definitely needs something more than 2 levels deep. The area my directory will cover for example, consists of around 12 small towns which is too many to have individually on the menu. Definitely needs some flexibility like Dorn's suggestion

I would like several layers of granularity with a comprehensive search function for instance states, cities & towns, Niche, regions that may encompass several states or even countries ie border towns on both Canadian and US sides of the border, and sub niches for instance livestock then cows, pigs, goats, chickens etc at least 5 layers with comprehensive search-ability think amazon side bar lol I think tags is probably the way to do this just sayin' :)

Yes, and a Footer builder! Footer links are super important for SEO.