XSLT: moving a grouping html elements into section levels

Question

I\'m trying to write an XSLT that organizes an HTML file into different section levels depending on the header level. Here is my input:

Answer 1

Here is an XSLT 2.0 stylesheet:

It should do what you asked for, although it does not stop at four nested levels but rather groups as long as it finds h[n] elements.