Microsoft does have a method for batch migration of public folders to Exchange Online that can handle larger sizes by breaking up the migration into batches.
You can split your public folders into smaller folders at the source, each less than 20 GB, and then migrate. This process involves creating multiple public folder mailboxes at the source and moving the content to these mailboxes before migration. Be aware that moving public folder content around can be a complex and time-consuming process, and you should plan and execute this carefully to avoid data loss.
The Hybrid Connectivity Wizard is typically used to set up a hybrid deployment between an on-premises Exchange organization and Exchange Online. For migrating public folders, it's not necessary if you are using a cutover migration strategy. However, if you want to use a staged migration where some mailboxes remain on-premises while others are in the cloud, or if you want to use the HCW's features for managing the migration, then you would need to set up a hybrid deployment.
After migration, it should be possible to reorganize the public folders in Office 365 to your desired state. Again, you would need to plan and execute this carefully to avoid data loss.