Chapter and Section Headings in Compile

I can’t quite figure out how to make my titles for chapters and sections look right when I compile. In the first place, after I compile, all of my titles for chapters and sections are in brackets. Secondly, I don’t get the Level 2 and Level 3 formatting option. There are three seperate rows of Level 1+ in the default and the second and third of these levels seems to effect the folders and files that are 2 and 3 rows deep. How is this different than creating new levels for 2 and 3 in the formatting dialogue box?