I believe your understanding of stage wiring is correct.
So in regular circumstances you use stage wiring to inject instances into MXML objects.
Injecting MXML children into an MXML object is possible, but with a bit of extra work.
First and foremost, you will only be able to get this to work if you create XML object definitions for an MXML component.
In this XML definition you will need to add method-invocation elements (doc section) that invoke the addChild method of the component.
So roughly you definition would look like this:
I haven´t tried this out in a real-world application, but it should work.
<object id="myComponentName" class="..." scope="prototype">
<object id="childComponent" class="..." scope="prototype"/>
hope this helps,