Hi Scott,
It is completely indifferent, what layer you place things on (unless you set to "Colour by Layer). The difference lies in whether you paint the group/component as a whole, from "outside" - or paint its geometry "inside" (while editing it). Incidentally, I have a little tutorial on this here: http://sketchucation.com/resources/tutorials/37-beginner/139-texturing-a-component-vs-its-faces-inside
Now if you cannot see the grouped object receiving the material (if I understand you correctly), you may be modelling in monochrome mode. You should go to model in shaded or better shaded with textures mode (View menu > Face styles).
If still no materials, there must be something wrong with your system.