Use the TOC tool which can be added to the toolbar or used within the book editor (T). It offers many options.
Some take a bit of a learning curve.
You CAN nest levels once they are on the list. select the group (top to bottom. I've had this flip the order in the past and can't reliably duplicate for a bug report) and drag STRAIGHT UP, until the target indicates. (You can also UN-nest by rightclicking the parent and select 'flatten')