ok, so i decided to finally DL and try out s3pe... looked through it then promptly looked on youtube for a how to video, found a useful one but my question is... i dont have alot of stuff in my mods folder, but my downloads folder is loaded with stuff...

both from the sims 3 store and launcher installer CC, all housing and community lots free from CC, i know that makes it sound weird.. but ive avoided clothing and objects as much as possible to avoid problems, so i did some digging here and found some info saying that sims 3 store stuff cant really be packaged if i understood it correctly...

since my downloads if full of mixed content whats the best way to use S3PE to merge everything?

edit:i have 2055 items in my downloads folder, im pretty sure thats contributing to some of my game lag.. as well as my super long load times

The .sims3pack in your Downloads are actually just backup installers of the files you have installed through the launcher already and definitely do need to be cleared out. You can either move them elsewhere on your PC to keep backups, or delete them outright- which will not remove them from the game.
Once they've been installed through the launcher, that content is actually in the DCCache folder and is already merged.

Aside from clearing the contents of Downloads, you'll also want to delete everything in DCBackup except for the file named ccmerged. There will be a few files generated in here per install, so if you've installed 2000+ things... that's a lot of overhead! You should definitely see an improvement once these extras have been cleared.

It's also definitely possible to convert .sims3pack to .package using Delphy's Multipack Installer + a few extra steps for Store content. That would involve wiping the launcher install completely and converting all of those files to .package- just depends if you feel confident doing that when you are new to the process