To use your car analogy, using Windows is like using a car that has the hood welded shut and can only be opened with a special key that only the auto manufacturer has.

You can’t repair it yourself. You can’t just take it to any expert to get it fixed. Only the manufacturer can fix it, because the source code (or car hood) is closed.

I use both terms. If I’m accessing it from a GUI, it’s a folder. From the command line, it’s a directory.