The basic structure is "We can (action1) (comparison) than (action2)", so:

We can represent the structure of sentences in more detail than is done in a diagram like 2

Is broken down as

• "represent the structure of sentences" - action1
• "in more detail" - comparison
• "[creating] a diagram like 2" - action2

The clause "in more detail", as a whole, qualifies the action "represent the structure of sentences".

Grammatically, the comparison could be replaced, like "using fewer colours", or even just "better".

The basic structure is "We can (action) (comparison) than (method1) if we (method2)", so:

We can represent the structure of sentences in more detail than is done in a diagram like figure 2 if we show the category to which each constituent belongs.

Is broken down as

• "represent the structure of sentences" - action
• "in more detail" - comparison
• "[creating] a diagram like figure 2" - method1
• "show the category to which each constituent belongs" - method2

The clause "in more detail", as a whole, qualifies the action "represent the structure of sentences", and compares two methods of achieving that.

Grammatically, the comparison could be replaced, like "using fewer colours", or even just "better".

Compare a much simpler example:

We can move ourselves faster than by walking if we run

• "move ourselves" - action
• "faster" - comparison
• "by walking" - method1
• "run" - method2