How do I find matching/nesting anything?

This isn't something that can be done in one regular expression, no matter how complicated. To find something between two single characters, a pattern like /x([^x]*)x/ will get the intervening bits in $1. For multiple ones, then something more like /alpha(.*?)omega/ would be needed. But none of these deals with nested patterns. For balanced expressions using (, {, [ or < as delimiters, use the CPAN module Regexp::Common, or see "(??{ code })" in perlre. For other cases, you'll have to write a parser.

my %arg_xlate = ( func1 => sub { "proc1{$_[0]}" }
                , func2 => sub { "FUNC $_[0] END" } );
while (<DATA>) {
  my $line = $_;
  0 while ($line =~ s/(func[12])\(([^()]*)\)/$arg_xlate{$1}($2)/ge);
  print $line;
}

__DATA__
func1(input1, func2(input2, input3))
func2(func1(input1, input2), input3)
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