if I make the title of the book TITLE in heading 1 format, and then the chapter title as 'Chapter' in heading 2 format, that will make a nested TOC?
Yes it will. I use heading 1 for the main book title (on the book's titlepage, e.g. "Granny's Big Fat Collection"), then heading 2 for individual book title / part 1,2,3 / etc. And use heading 3 for the actual chapters.
I know some folks don't include the main book title in the Sigil ToC, but it puts a top on the tree and satisfies my soul.