Short answer: you can only read from the .love itself, and read from / write to the save directory, if you set the project's identity with either a conf.lua file, or the function love.filesystem.setIdentity. (you can drag files/folders from anywhere and use the love.filedropped and love.directorydropped callbacks though)
Long answer: lua's own io functions are able to access arbitrary locations, but it's not cross-platform and will be a pain to get to work right.
Me and my stuff True Neutral Aspirant. Why, yes, i do indeed enjoy sarcastically correcting others when they make the most blatant of spelling mistakes. No bullying or trolling the innocent tho.