It sounds like you are on the right track. One of the great features of DxDesigner and the it's database structure is the ability to reuse portions of the circuit.
From your message it appears that you want to use multiple copies of the same circuit on one PCB and you are on the right track with hierarchy. DxDesigner even has a built in feature to copy circuits for this use case. Simply select the block icon, use the mouse to select the circuits you want included, type in the name of the block and check "extract schematic". A new hierarchical block with the selected circuits will be created.
To add the second block, look in the symbol library tab in the local symbols, and simply add another copy of the top functional block symbol. Each of these top functional blocks will have a unique name and the netlister knows how to traverse these names to create instance level refernce designators and unique nets.
If you still have questions, contact our support group at http://supportnet.mentor.com/
I recently showed another method to copy circuits from one design to another in the PADS webinar located here http://www.mentor.com/products/pcb-system-design/multimedia/player/pads-ds-suite-dxdesigner-in-the-pads-flow-77237468-70b2-42bd-8b3d-4b91bc38bd97http://auth.mentor.com/products/pcb-system-design/multimedia/pads-ds-suite-webinar
I have shown the how to copy circuits in your use case, but I haven't located a published video or tech note on that yet.