Organized Chaos

I had a friend over the other day for a play date and we eventually moved up to the attic to play. She commented on how organized the attic was.

I suppose upon first glance it looks fairly organized.

It looks not bad up here, but
see the pile of papers on the desk?

Yes, that pile. Not only is there that particular pile...

...there are also piles of papers hidden away in this closet.
So it is actually not as organized as it could be!

Here are the piles spread out all over the floor.

Can you tell where I was sitting as I organized?

I am making great headway and there are lots of papers to be filed and a huge bin of recycling. The difficulty for me is sorting and purging the kids art and schoolwork. I have piles of stuff for each kid and even though I have sorted through their stuff before, I still have quite a selection left.

Questions:

1. What do you do with your child's artwork or schoolwork?
2. How much of it do you keep?
3. How do you store it?
4. Where do you store it?

I am starting to get overwhelmed with how much I have and yet I have a hard time parting with it. Suggestions?