The application service CI should be the top level of the specific installation of the product. It is key to event management, so think in terms of impact, i.e. don't combine things in an Application Service that aren't in some way impacting to one another.

To address your module problem this is by no means the only solutions, but here is an option based on my personal experience and understanding of the CSDM:

1. Create Application CIs using a type field. The application can have four types: Platform, Business Application, Infrastructure Application, and Module. Doing this allows for the application CI representing the platform or business application to be related to the modules it hosts. The benefit here is you can use a single software model for both if desired. The top level Application CI is related to an Application Service CI. Example:

Application CI module => Application CI platform => Application Service

Requisitioning module => SAP Financials -Northwest Div PROD => SAP - Northwest Div PROD