Can a student be in more than 1 group?
You can put a student in as many groups as you want. The platform is designed to keep things flexible for you. This way you can see data results and get reports across a variety of characteristics you choose.
Generally though, you don't need to group students by any of the data you add on a student's profile—i.e. grade level, background flags, etc.—since you will be able to sort students by these fields at any time.