Overall this is definitely one of those areas of Scrivener where it can support how you prefer to write, and think about your writings, rather than you having to meet it half-way or conform to its intentions. There are few right or wrong answers, with some exceptions, surely—we sometimes get people on the forum who have one single massive entry in the binder like they would use Word, and find the software hard to use. Yeah, that’s probably a case where a little compromise or conformity with the design might help. 
But you’re past that point already!
I think once you get down to the “chapter length” part of using Scrivener, then you’re in the green zone, and anything beyond that point really, is fine and the program may well even become more useful if you do so.
This example is way outside of the realm of a novel, but you can download an older copy of the project used to create the user manual PDF, in your Help menu. Look for the .scriv ZIP entry in the dropdown.
For the most part you’ll find this approach follows the very headings you’ll see throughout the PDF, starting at the very top with the Parts, all the way down to unnumbered minor headings. In other areas you’ll find the detail goes much further than that though, most evident in some of the appendices like the menu appendix. In there, you will find an almost 1:1 copy of the entire menu hierarchy has been rebuilt as an outline in the binder. I can navigate through that area of the manual using the same navigation I would take to look at the menus themselves. In the preferences/settings appendix, in many case each individual checkbox or dropdown is listed as a separate entry.
So that project certainly represents extremes, and supports your speculation that this could even become a paragraph-by-paragraph tool. Absolutely, if it makes sense to. The implication also being made here though is that even in one project you don’t always have to, if one areas makes sense to. There are a few chapters in the manual that only have a few sections of text in it, while others have many hundreds. How much detail does this area of your text need, how often will you want to jump to that specific piece of text, and how useful might it be for you to colour-code different areas of something a reader might see as one long block of text? These are all questions to ask, and they are things you can explore as you go. The Split and Merge tools (addressed in the aforementioned tutorial) mean you aren’t going to get trapped one way or another.
This forum thread contains a list of links of further reading you might find useful. There’s quite a number of branches off from there, and some of it may be a bit more advanced, but hopefully you find bits and pieces of it useful. The post itself also addresses one of the main operational differences between a program like Word with its own outliner feature, and program like Scrivener. So if you are familiar with Word’s outliner, that may be helpful. The main difference between the two, other than the mechanics of where you click and such, is what I touched on above: Scrivener’s outline can go way deeper than Word’s because it doesn’t have to represent headings your readers will see. This is why we call it an outline for writers, not readers.