Improve error messages on mkdir failure

Improve error messages on mkdir failure

This commit ensures that `fs::create_dir*` isn't called throughout Cargo
and is instead routed through our own wrapper `paths::create_dir_all`
which brings with it a few benefits:

* Gracefully handles when the directory already exists (which is the
  behavior we always want anyway)
* Includes the path name in the error message of what failed
* Handles races of creating a directory by default

Closes #7304