I find the hierarchical view quite useful, but I can't group in this view, although there is a tip telling me that I can (Screens attached). Could this be fixed?
In hierarchy view grouping is not allowed in order to avoid scenarios where the parent would be in one group, while the child story is in another. The tooltip is also correct, stating that you can create story hierarchy using drag and drop (check attached screenshot). What you need to do is select the desired child story, drag it and drop it over the desired parent.
I hope that you will find this functionality useful while in hierarchy view.