Component/body help please

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To start with, have I got rule #1 outlined correctly.
First create a component and that component becomes a vessel for all sketches and bodies used in and on (Booleans) that component?
I will use a car engine as an example to highlight my confusion, I would like to create the engine block first so I create a new component and rename it EngineBlock.
When I come to create the pistons and other components do I create them as new top level components or do I create them as new components within the EngineBlock component?
Or is it better to create them as bodies and then turn them into components?
Do I turn the bodies that are located inside a component into components or do I leave them as bodies?
Do I need to activate a component that is located within another component when I work on it or can I just activate the top level component?
Is it wise to use the dissolve function on the bodies that are located within components or is it better to leave them as is?