You can manually start a backup using
File -> Library -> Library BackupIt will backup your Library
and your settings.
If you are at same time going to restore your backup you are able to choose, if you want to either restore your library or your settings. Of course you also can restore both of them at once, too
You are also right with your suggestion to keep that given folder. But it only keeps your library, not your settings (as you already knew
). But it may be easier to handle the single zip file created by MC as a backup container than fiddling around with a folder structure.
MC also offers automatic backups (including library and settings), just in case you once need them. If you wanna find those automatic backups, have a look here:
Tools > Options... > File Location > Program Files > Library Backups.