AND as a follow up question, by connecting via the related key words will the set also be able to pull in the rest of the data in the template that is filled out even if the other fields are not objects?
I think you are better of creating TYPES for al of your 5 levels. Then they are all “connected” in their sets and can connect them via a relation that allows you to pick other objects.
Another way is to create sets based on a relation. For example, if you have a Project relation, you can make a set from that and see all objects that contain that relation.
Last thing I can think of is create a status relation that is a project, which each status being your 5 levels. Then you can create set for each project and create view for each of you 5 levels (see my topic here: Use Relation(s) as Tags!)
I think there might be other ways but top of my head these examples come to mind.
No, I don;t think that is possible (yet). Only thing I can think of is having a filter view of a set. When you create an object from a filtered view relation are being auto-filled based on the filters.