Select View/Folders/Favorite, or AppMenu/Folders/Favorite to show the Favorite folders in the Folder Pane.

I was hoping for something like outlook favorites where I could see my favorites at the same time as my normal email. That is, I don't have to toggle to get to my favorites. My use case is I typically have my favorites listed for doing this like quickly seeing unread email in my favorites as well as taking quick looks into favorites.

Perhaps it would help if you gave your Favorites a distinct color:

https://addons.mozilla.org/en-us/thunderbird/addon/color-folders/

http://chrisramsden.vfast.co.uk/3_How_to_install_Add-ons_in_Thunderbird.html

This works on user-created folders, but to apply colors to accounts, try this add-on:

https://addons.mozilla.org/en-us/thunderbird/addon/account-colors/