Warren, you raised two good questions, each with its own line of discussion. Here’s the first, and I’ll respond to the second question with a separate post under this same topic.
Yes, that takes place at what I call the Planning level. My introspective investigation indicates to me that planning is a trial of different sequences of controlled perceptions, the control of one providing necessary preconditions to bring the next under control. It can involve the building of a new sequence, looking in memory and in the environment for preconditions for controlling the final outcome (necessary or possible prior CVs on the way to it) and looking in memory and in the environment for means of controlling those preconditions.
As I understand it, Sequences that are repeatedly successful are remembered as routines, ‘habits’, familiar routes: when perception x is controlled branch from that perceptual input function go to every higher-level perceptual input which has made use of it in the past, but this branch of the perceptual signal has no effect if the perception to which it is input is not currently being controlled. By Hebbian learning, this is an important structural form of memory (immanent in the branching structure of the hierarchy).
(I call it the Planning level because the notion of a Program level is an analogy to the Boolean logic of computer programming, which derives from and is dependent upon language).
Your question above sounds like you agree with what I was proposing: that the ‘reorganization’ experienced in MoL is (or may often be) of this sort.
To the extent that this may be so, the dilemmas of internal conflict may often be pairs of controlled sequences which intersect by each having the same controlled perception y as part of the sequence, except at different values. Or they may each be closed through the same perceived aspect(s) of the environment as means of control (the same atenfel), but the atenfel must be in a different state (happenstance or controlled by oneself or by others) depending on which sequence is to be controlled: for example, a door must be open if you are to control one sequence to work and closed if you are to control the other.
But the trial and error which responds to intrinsic error is not a trial of different sequences. According to Bill’s model of the reorganization system, reorganization of the control hierarchy in the nervous system is done by nerve cells making and breaking synapses, extending and retracting axons and dendrites.
This can occur at other levels. Learning to play a musical instrument involves reorganization all the way down to input and output intensities. That’s Hebbian learning, I think, and not instigated by intrinsic error–although the repeated exercise does cause changes in the intercellular chemical environment which may be similar to the chemical changes that I postulate are the intercellular expression of intrinsic error which causes reorganization.