Let's get this said upfront. Etsy is an awesome platform. However, I do not understand why the sections appear to be so limited. Sub-sections would be a cool feature and help to better organize products. As a seller, what do you do when you sell two very different types of products? A long list of sections makes it hard for a customer to find what they are looking for. Sub-sections would be really helpful in refining the categorizations of products in a shop.
What I have found is that, rather than mixing totally different types of products in a single shop, it makes more sense to create multiple shops. Etsy has a requirement that a person who manages multiple shops be completely transparent and provide information about both shops in the About area. Heck, this is actually good and you have the opportunity to cross-sell between shops.
We provide two types of products - digital and physical. After playing around with defining sections to separate the digital from the physical we found that other Etsy sellers have established two shops - one shop for digital products and instant downloads and another shop for physical products. This allows the seller to make it easy for customers to find the exact product that they are looking for.
If a customer is looking for a print (or wall art) and they find your digital store then they can easily find the physical version of the product by clicking a link in the digital product's description (manually placed link when writing the product description) that takes them to your physical product shop. And the reverse is also true.
Our belief is that anything that makes things easier for the customer is the right thing to do.