That's all Sketch -> Include Library does. It's just a convenience feature to add the necessary #include directives to your sketch for a given library. It doesn't do anything else.
That won't work. From the Arduino sketch specification:
https://arduino.github.io/arduino-cli/latest/sketch-specification/#data-subfolder
The
datafolder is used to add additional files to the sketch, which will not be compiled.
You're at least getting closer. Libraries must be installed to the libraries subfolder of the sketchbook folder. You can learn how to do a manual installation of a library here:
https://www.arduino.cc/en/Guide/Libraries#manual-installation
Give it a try and then let me know if you have any problems.