Hi Mark,
Thanks for your interest in the project and for joining the dev list.
Regarding Element Sets, I'm hoping that Patrick can jump into this thread because he has done a lot of work with element sets in Omeka. I've cc'd Patrick, and would encourage you to check out a blog post where he linked to six different element sets that he has created:
http://www.patrickgmj.net/node/177 If possible, try to keep your Omeka discussions on the list so we can all chime-in where necessary.
The second part of your email about hierarchical elements in Omeka is interesting. Omeka hasn't been designed to model those relationships, and we typically think of the software are a presentation tool where flat data is OK, rather than a robust storage tool where those hierarchical relationships can be important.
With that disclaimer, that doesn't mean that a workable solution is entirely impossible. A goal of the Omeka's design is to make it easy to use, while offering different uses that are enabled by its extensibility. It may be easier on your part to adopt another software solution which has this nested metadata as its primary focus, or if you're up for the challenge, perhaps this could be your own project to branch the development of Omeka and try out some things. I don't think this is something we'd want in the core of the software, but perhaps there are ways that the core could become more agile to allow plugins to interact this way.
I'd encourage you to map out exactly what you're looking for in terms of nested metadata before taking this endeavor on, and use this developer list as a space to share your thoughts and get feedback from the group.
Best,
Dave