Basically, I'm looking to do this:
http://i.imgur.com/XVDDQuv.png
However the gray outline isn't surrounding the category title anymore, and is instead running down the lengths of the page. I managed to do that just by jacking up the height of the categories and by adding a padding to the top.
http://i.imgur.com/0gxM25e.png
With the red arrows, I'm looking to create a gap in between categories:
http://i.imgur.com/VpHXwDq.png