I don't tend to have too many frames on the timeline. I use Actionscript 3.0 and the only code I place on the timeline is stop();. I organize everything in classes. I have a main class that creates everything with a state engine. The next most important class is the Game class, which creates and runs the game. I then have classes for the objects in the game. I also use a framework, which contains a lot of classes I extend and other ones which I use functions from.
My first Flash game was written in Actionscript 2.0 though. It has 5 frames: The intro, the menu, the game, the game over screen and the leaderboards. I wrote things kind of like you did, a lot of main gameplay control on the timeline and the other stuff on instances.