So a few areas of comment here:

1). I believe that technically, the original description by DA on this issue was that the Project List only really needed to contain the project name (+/- a description of what the successful outcome looked like). The idea was that all you really needed to do was identify the very first "next action" and put that on your Next Actions context list(s). When you completed that one, you could then identify what the next sequential action was and put that one on your Next Actions list .. .. and so on and so forth until the project was completed. The weekly review would help identify any active projects for which a current, uncompleted Next Action wasn't in your system. For those projects where not all actions are strictly sequential, you could certainly create Next Action items for the parallel steps, but for the sequential steps, really only the very next step needed to get onto your Next Actions list(s).

2). However, if you're like me (and it sounds like you are), I like to take a project and "plan out" most, if not all, the steps needed to complete it. For me, it gives me a much clearer picture of just how big this initiative is going to be and how much resource (mine own and others) will be required. But, if you're going to approach it that way, you might end up with Actions that aren't really Next Actions because later sequential steps would require that previous steps be completed first. If, on the other hand, your Project List contains the nested action steps, and your Next Action list(s) contain only true next actions, you do, indeed, end up writing these things down twice in a paper system. That's one of the reasons that I, personally, choose to use a digital system. So my use of paper vs digital is the opposite of what you're contemplating - rather than move to a paper actions system to accomodate your paper note-taking/inbox, I choose to use a digital note-taking/inbox to accomodate my digital actions system.

3). Either way, the issue of linking actions to projects has been the subject of many, many discussions here. Some say you don't need to do that at all, while others (myself included) feel that it's desirable. Easy to do with most digital systems - somewhat harder on paper, although various suggestions of including the project name (or some project code) into the text of the Next Action item is adequate to make the link if you want to have it.