Thanks for bringing this up, @fkaye. I think there's certainly improvements to be made in this area.
First, I want to draw your attention to some tangentially related ongoing work on improving the display of repeat groups: Separate screen in jump screen for listing repeat items, Refinements to Repeat Group Navigation. The current plan is to start with the specification at https://github.com/opendatakit/roadmap/issues/19.
Non-repeat groups could potentially be collapsed in similar ways. Most of the changes proposed so far have been for the jump screen/hierarchy view. It would be helpful to get a very rough idea of how you would like groupings to be identified. A paper-and-pencil sketch with some ideas would be great.
When I've given this some thought, the big challenge I've run into is that form developers use groups in pretty different ways. In fact, I do this myself. Sometimes I use groups simply to bring structure to my XLSForm. I often omit a label for those groups but sometimes I include one. Other times, I create groups with labels and they're important for giving enumerators visual cues on where they are through the breadcrumb at the top of the screen. So if we do come up with a great way to indicate groupings, we may want to make it configurable by the form designer.