Basically I adjusted the file structure of my original images due to repetitive files and improper file naming. I thought iphoto would auto updated my changes to reflect it.... I was wrong. How can I update iphoto to see my new folder structure?
Did you show package contents and mess around in there? If so, I hate to break it to you, but you probably can't fix things.
You're not expected to mess around in the iPhoto file structure, and one of the most common remarks in these forums (aside from the usual Brand X is better than Brand Y comments) is to never screw around with the iPhoto file structure.
Use the iPhoto interface to make changes, ignore the underlying file structure.
If that doesn't work, your best bet is probably to go through the folders and move all the photos you want to keep to a new folder, delete the old iPhoto library, and reimport all your photos. I'd recommend using only your original photos, which means you'll loose any changes you've to images within iPhoto (adjusting exposure, etc.).