Can I pull posts from subsites and have them appear under categories on main?

It’s possible, but cumbersome. Each site has its own posts table. You’d need to first get all the applicable site IDs, then step through each one to get that site’s posts. By script of course, meaning some custom coding.

You might consider using a custom field or taxonomy to manage the counties instead of using separate sites. It’ll make multi-county queries easier.

Honestly, I’m not convinced you really need multisite. The classifieds could have been managed as a custom post type. Of course, I don’t have the full picture, there may be other factors that really do call for multisite. Even if not, it’s not my site, do what works for you ??

The other reasons I chose multisite is to be able to eventually assign one person per county to write and give them access to the subsite. Using the subsites, also makes it much easier for us to sell ad space to local businesses and be able to place those ads in the correct subsite that will get them the most exposure while also being able to maximize the number of ads we can sell.

I am using ‘post indexer’ and ‘global site search’ plugins by wpmudev to maintain and display a global listing of all blog posts added across all blogs in the network, with small adjustments.
If you are comfortable with php, you should find a workaround to show blogs as categories.

Another option that might wanna try:

Can you post a link to your blog so that I can see how it looks set up that way?

Sure. here it is : https://healothers.com/library/