I've never seen anything like this before. I connected to a vCenter with two hosts. The first host has a single parent entity with 33 VMs. They are all stacked together and I cannot expand the entity. If I click on it they will appear on the right main console panel. It is neither a folder nor a vApp. You can see on the image what I mean, because I don't know any other way to rephrase my question.
First: i realy don't like the vSphere Web Client - it's much more complicated than the application.
To your Problem: i belive this is a default behavior. In the left pane you only see machines you opened recently in the web client. if you are looking for a different machine, click once on the "(33) Virtual Machines", and the double click the machine you want in the main window. After that, this machine will be available in the left pane.
First: I really DO like the Web Client, took me a while but it's great for dealing with multiple objects at once :)
Looking at your problem you're in 'hosts and clusters' view and can see that you've created a single 'Datacenter' and added a couple of hosts. You've not created a cluster and therefore not moved your hosts into that cluster, so you will see the VMs linked only to the hosts on a host-by-host basis.
Basically what you're seeing there is the correct behaviour for that volume of VMs, you might not like it but it's there for now.