When you say "I need mail to be sorted by section" I'm not quite sure what you mean.
If you want Prof's and TA's to only see emails from their own sections, you have to, on the classlist page, fill in the section for all Prof's and TA's so that their section matches the section for their students. Since in your case, these fields are empty for all Prof's and TA's, and you have set $feedback_by_section = 1, there is no one to receive email.
If you just want to sort email, by default the sections and recitations are listed in the subject line of the email so it is easy to filter email if that is what you want. Some people set up gmail accounts for their sections and handle email that way. I believe there was a discussion on that on the forums awhile ago but right now I can't find that. Maybe someone else knows where it is.
Arnie