Is there a way to create a hierarchical structure where a simple issue project can be housed in a project management project.
No. JIRA doesn't have that type of heirarchy. All projects are equal.
You could try the Structure add-on if you want something more complex than Category, Project, Issue, Sub-task. But I'd take a look at Portfolio - it doesn't really do what you describe here, but it does offer functionality which helps you work as though it did.
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