Separate group for each project

I would like to create a separate group/role for each project, so I can assign users to certain groups/roles ... then the user should be able to view/manage only those projects and not all projects. Currently, the user is able to see all projects. 

Can somebody point out what would be best thing to do? Basically I want to give permissions for each and every project to certain users, so user A will be permissions of project 1,2,3, while user B will have permissions of project 3,4,5, but user A won't see projects 4,5 and user B won't see projects 1,2.

Thank you

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First, remove "JIRA users" from all your projects.  That's the reason that people can see everything.  It's a default setup for a new JIRA, and although it's nice to get people started, it's a terrible default for anyone who might want to have limited access projects.  

You will need to replace the usage of jira-users with other ways to let people into the projects that are more narrowly defined.  It is quite likely that your permission scheme is the default and says "people in the role of User can see this project", so you now have two simple choices - you can either put A straight into the role of user in projects 1, 2 and 3 (and B into user role in 3, 4 and 5), or you can set up the groups, with user A in AAA, then add group AAA to the role of user.

I recommend avoiding the use of groups in permission schemes, it's inflexible and a pain to maintain.  If you want to use groups, use roles in the permission schemes and then put the groups into the roles at a project level.

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