I can't help with info about a product that will make the SSRS sites "look" like one site

As far as report security is concerned, you can secure items within a folder if you wish. When you hover over the report, you should see a dropdown list appear (initially just a arrow head - click on the arrow head). You will see a list of things you can do including "Security". Click on security and you can set permissions for the report item. By default, permissions are inherited from the parent folder but you can choose to overide these permissions. I would suggest that, wherever possible set permissions at the folder level and also, if you can, use Windows Groups.