I keep trying sort the Item List by Area but when I click on Sort By, nothing happens.
The Item list in the 'Items' section is grouped first by Project, so what it does when ordering by area is do it within each project first. So you'll have Project A with all its Areas ordered within it, then Project B with all its Areas ordered with in, etc.
That said, it will reorder Items by Area- but within each project.
So in essence it won't take the Items out of the Projects and mix them together to order by Area. This is because it is Project-centric. Hope this helps clarify and if you need anything else just let us know.