Adding  to options on node edit and node create screen
There is the Taxonomy Term Reference Tree module that will format terms hierarchically.


  This module provides an expandable tree widget for the Taxonomy Term
  Reference field in Drupal 7. This widget is intended to serve as a
  replacement for Drupal's core Taxonomy Term Reference widget, which is
  a flat list of radio buttons or checkboxes and not necessarily fit for
  medium to large taxonomy trees.


This module produces nested ul lists, which seems optimal for styling hierarchies, if needed.