This is a plugin which I use all the time, but seem not to have posted here since FT2 was released.
It reformats the current outline, adjusting the number of # heading levels used.
Deeper hashing ⌘⇧]
Shallower hashing ⌘⇧[
(I personally tend to do all the outlining work with 1 or no hash headings, and then use this plugin later on in formatting mode, to automatically apply hashes down to level N of the outline).
Same outline with three different levels of hash heading:
0/5 outline levels hashed:
2/5 outline levels hashed:
5/5 outline levels hashed: