you can't arbitrarily sort/arrange notes, e.g., for outlining

You can, within another note. We spent a lot of time thinking about this when building the new note editor and ended up deciding that standalone notes should be the mechanism for outlining. You can drag items, annotations, non-annotation PDF text, and other notes into a standalone note and then drag them around as blocks to rearrange them, with all the benefits that a note editor gives you of being able to type around them, flesh them out, add lists and other formatting, etc. The idea is to make it possible to go from annotations to notes to a draft that can be inserted into a document with active Zotero citations.

We decided to avoid interlinking due to the problems inherent in that model — e.g., if you edit or delete a note or annotation, we didn't feel that should affect a note where you had already dragged the object. There are obviously some people who love the networked approach, but that's not something we wanted to get into.

(There is, however, much more we want to do with notes, so what's there now shouldn't be considered the final feature set.)

in the current standard layout, dragging other items & notes doesn't work well because they get selected & focus shifts when you try

Yeah, we'll have to see if we can solve that, but I meant in a separate note window (plus, obviously, annotations and non-annotation text when using the PDF reader sidebar).