i understand that some files get published to this folder in my application. i want all the files to be in the same folder. how do i do this?
meaning that i want the setup.exe and everything to be in one folder after i have published the application. i dont want to have an application files folder at all
You are getting hung up on what the IDE looks like when you create a Setup project. There is no "application files" folder, the Setup project creates a setup.exe file when it is built. That's the only file that you need to distribute to your client.
The "application files" node on the screen is simply a container in which you can put files while you create your Setup project. Those files will be available in the application's install directory after your client runs the setup.exe installer on her machine.
Actually run the setup.exe on your machine to see what it will look like on your client's machine.