For some reason, this is where I ahve had to place the logo for it to work:
C:\Users\Neil\AppData\Roaming\Marine Aquarium 3
and that folder was hidden,
Why can't it just go in c:/Program Files/Serene Screen/Marine Aquarium 3?

Because this is what Microsoft has dictated. Applications SHALT NOT write to Program Files except during Installation.
As Jim said, dragging logo files there is a temporary thing. In a future MA3, there will be a Logo Picker interface.