Correct. If you want to preserve the album sorting you would have to create a folder for each album and copy the photos from each album into the corresponding folder.
Once the files are transferred to the iXpand the native photos app would not see the photos. you can delete the files from the iOS device but to free the space immediately you would need to go delete all the recd photos. Otherwise iOS will keep them for 30 days IIRC before they are fully deleted. Once that is done you would have to use the iXpand drive app to view photos stored on the iXpand.
