I understand where you are coming from, and it’s a perfectly reasonable request, but you seem to be making an assumption that everybody works the way you do.
I suspect that you are recording music materials from sources that you have created yourself, where each part is associated with one ‘song’ only, and you want to keep all the component materials together, in a single folder on a single disk drive on your computer. Yes, and a lot of people also want that.
But lots of people do work where they are assembling music, speech dialogue, samples, video clips, bla bla bla from a myriad of sources - sources that are not necessarily relevant to just one ‘arrangement’ or ‘song’.
To work your way, those people would need to copy the source materials into the sole folder/directory structure you envisage. But those source audio materials may not be located on the same computer, storage device, server, geographical location whatever…and they may be very big files, and the bits you want may just be a very small part of the whole file.
The Cubase arrangement file is essentially what many people know as an Edit Decision List (EDL). Look it up, and you’ll find it’s a well-used concept, where the arrangement file just contains reference pointers to the physical locations of all parts that make up the arrangement. The EDL also knows the used in/out points for each of those component takes, which track/channel they should play back on, and at what time in the arrangement they should play. And of course, the arrangement file also knows about mix and automation parameters, and where they should change in real-time. (in Cubase, the arrangement file also contains the MIDI data too)
This sort of operating paradigm has been at the core of many audio and video editors for a long time now. Ask users of products like Adobe Premiere, and you’ll see that it works very well. It’s really quite relevant where the source materials might be large. Imagine if you had to have the whole of a video file, just so you could use a few seconds of audio, somewhere in the middle of it?
In the scenario you envisage, if any of your source files were in shared use by another person, then they’d be pretty annoyed if they lost them because you’d decided to save the project elsewhere and just you moved them without their knowledge.
You’d even annoy yourself if you saved your kick drum sample in a new location, and then all the other song arrangements you’d created that used that kick drum sample just lost touch with their source material. You’d have no kick drum on any of those tracks any more, unless you manually made copies of the file(s) back to their original locations.
What you can do is to copy the whole source folder and then open the new arrangement file in Cubase, at which point Cubase will detect that the folder has moved or been copied, and will ask whether you want to use the new or old locations. That way, you stay in control.
Cubase is quite intelligent in this way - it understands the difference between relative and absolute folder locations - and is asking you to confirm what you intended.
Your idea isn’t wrong. It’s just a ‘different’ way of working. Cubase’s method tries not to waste disk space, by duplicating data unnecessarily - and in a networked environment, reduces some of the need to move whole, large files across relatively slow media. The arrangement file is very small, compared to the size of the data it references.
You might also like to look at the way programs like Cakewalk can save data optionally into ‘bundles’ or archive files - where the whole song directory structure and files are embedded within a single ‘archiveable’ (ie copy-able) file. But that file wil be a lot bigger than a Cubase arrangement file - certainly it will usually be far too large to be treated like an email attachment.