This turned out to answer my own question:
RewriteCond %{REQUEST_FILENAME} !-d
RewriteCond %{REQUEST_FILENAME} !-f
RewriteRule ^(.*)$ application/index.php?url=$1 [QSA,L]
If the URL doesn't exist, it loads the index.php file inside of the folder "application", and it keeps the URL the same, which was exactly what I needed...
Thanks for the answers!