Yep, files should be in the right directory. The folder structure in src folder should reflect the structure of the theme:

src\sections\section-name\section-name.liquid will be copied by gulp to THEME_ROOT\sections\section-name\section-name.liquid

Also, gulp is watching for file updates. So you have to save file to initiate the process.

I know, probably it’s not an optimal setup for a local dev environment. You may google and come up with your own custom solution. From my point of view this dev-kit is not bad at all as a reference point: https://github.com/brohlson/themekit-webpack-tailwind