This question is about the add-on: (Issue Templates for Jira)
The basic Portfolio hierarchy is:
Can I model out a whole template in this structure, starting at the Initiative level?
Not entirely sure if I understood it correct or not but if you are asking about flexible hierarchy in Portfolio, yes, it is possible.
You can add any number of levels on the top level hierarchy as explained at https://confluence.atlassian.com/jiraportfoliocloud/configuring-initiatives-and-other-hierarchy-levels-828785179.html.
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