I've used the block thing in my collection too. I got a 2X2 piece of wood and cut it into 4 inch pieces, painted them, and set them towards the back of the shelf. They work great. I also thought of getting those kids play blocks with the letters on the sides for some whimsy, but they're way more expensive than I thought they'd be.
As for organising them, I like what you did. My collection is mostly klickys, animals, and a few small odds and ends. I've toyed with the idea of grouping them all by color because it might be more visually appealing, but they way I have them now feels like it tells a bit of a story, so I haven't futzed around with doing that. But you're more than welcome to try the idea out.
