I don't think that is possible at the moment. It would need some changes in the PictureFlow code, which in my opinion are not very hard but still, it's not the simplest of things.
What you propose has been discussed some times as you said; during the discussions, one of the problems people came into was, if I recall correctly, the fact that PictureFlow wouldn't know which image to choose in order to present the album. Again, I'm unsure, but I also think that the discussion died and until now no work has been done on implementing Albums view in PictureFlow.
You would need to "heat" the discussion again in order to eventually get some developer to look into it and do the necessary code work for Album display to become a reality in PictureFlow.
(I'm also unsure if this is on the right section, but a moderator can light us on that)