You have set up what is called an ad hoc network. This type of network is used in situations where there is no router and enables computers to share an internet connection and folders. However you do have a router and both machines are connecting to the internet through it. I suspect that the reason you can't share folders is a conflict between the ad hoc network you have created and the infrastructure network that already existed between your router and two computers.
The simple answer, as both machines are using 7 or higher, is to create a Homegroup, which you can do in Network and Sharing Center. Hopefully the Homegroup will disable the network you have just created, or at least ask you if you want it disabled.
Try that method and let us know how it goes.