yup - you got it!!
I used <h3> and <h4> just to differentiate a lowercase section of words from an uppercase. You could use any string of nonsense letters as long as it isn't used elsewhere in the book. I also pretty much end up using <h3> as my chapter headers most of the time, so that came to mind to use.
The use of <h3> as a chapter designation is absolutely NOT required. You will find some people just use <h1> for every heading... I like the ability to use multi-level ToC, both visually (it looks cool and matches the organization in my brain) and functionally (being able to collapse/expand certain areas), and it is more semantically correct if you have a document with subsections to use the different levels of <h1-6> to denote the subsections. It also follows the standard for accessibility...which is a good thing.
The actual <h> tag used is only a semantic indicator of the 'level' of the heading. You can
style the heading to look however you wish.
Code:
<h1> Cover
<h2> Front matter
<h2> Title
<h3> Prologue
<h3> Chapter
...
<h3> Chapter
<h3> Epilogue
<h2> Back matter
<h1> Back cover (if used)
-- OR --
<h1> Cover
<h2> Front matter
<h2> Title
<h3> Prologue
<h3> Part or Book
<h4> Chapter
<h4> Chapter
<h4> Chapter
<h3> Part or Book
<h4> Chapter
<h4> Chapter
<h4> Chapter
<h3> Epilogue
<h2> Back matter
<h1> Back cover (if used)