If you are interested in a more compact style, you could be writing your @sections loop as

section($tab, sub {
    for my $line (@$_) {
        heading($tab,$1,$2, { id => idify($2) }), next if $line =~ /^(
+[1-6])\s+(.*)/;
        line($tab,$line),                         next if $line =~ /^<
+/;
        line($tab,"<$line>"),                     next if $line =~ /^[
+bh]r$/;
        paragraph($tab,$line);
    }
}) for @sections;
[download]

I like this for its tabular look where the action is on the left and the condition on the right. It also avoids the chain of elsifs. The danger is that it becomes difficult to stay the course when the actions become more complex...

hdb, it got a little more complicated than it was. Here is the the most recent version. There are a few more elsif statements. I am almost content with it now. :)

sub story {
  my ($source,$magic) = @_;
  my $tab = 3;
  
  my $inc = 0;
  my @sections;
  my @toc;
  while (my $line = <$source>) {
    chomp($line);
    next if !$line;
    
    if ($line =~ /^2/) {
      $inc++;
      my ($number,$text) = split(/ /,$line,2);
      push @toc, anchor(textify($text), { href => '#'.idify($text) });
    }
    
    push @{$sections[$inc]}, $line;
  }

  $inc = 0;
  for my $section (@sections) {
    if ($section) {
      section($tab, sub {
        for my $line (@{$section}) {
          if ($line =~ m/^</) {
            line($tab,$line);
          }
          elsif ($line =~ /^& /) {
            my ($symbol,$magic_word) = split(/ /,$line,2);
            $magic->{$magic_word}->();
          }
          elsif ($line =~ /^[1-6]\s/) {
            my ($heading,$text) = split(/ /,$line,2);
            my $id = idify($text);
            heading($tab,$heading,$text, { id => $id });
          }
          elsif ($line =~ /^bq\s/) {
            my ($symbol,$text) = split(/ /,$line,2);
            blockquote($tab,$text);
          }
          elsif ($line =~ /^[bh]r$/) {
            line($tab,"<$line>");
          }
          else {
            paragraph($tab,$line);
          }
        }
      });
    }
    if ($inc == 0 && @toc > 3) {
      section($tab, sub {
        list($tab, 'u', \@toc, { class => 'two' });
      }, { class => 'contents'} );
    }
    $inc++;
  }
  
#  paragraph($tab,"written by $root_user", { class => 'author' });
}
[download]

No matter how hysterical I get, my problems are not time sensitive. So, relax, have a cookie, and a very nice day!
Lady Aleena

I just want you to know, I did it your way when I made a handful of additions. You were right about the elsifs spiraling out of control. Here is the updated version. :)

sub story {
  my ($source,$magic) = @_;
  my $tab = 3;
  
  my $inc = 0;
  my @sections;
  my @toc;
  while (my $line = <$source>) {
    chomp($line);
    next if !$line;
    
    if ($line =~ /^2/) {
      my ($number,$text) = split(/ /,$line,2);
      push @toc, anchor(textify($text), { href => '#'.idify($text) });
      $inc++;
    }
    
    push @{$sections[$inc]}, $line;
  }

  $inc = 0;
  for my $section (@sections) {
    if ($section) {
      section($tab, sub {
        for my $line (@{$section}) {
          line($tab, $line),     next if $line =~ /^</;
          line($tab, "<$line>"), next if $line =~ /^[bh]r$/;
          $magic->{$1}->(),      next if $line =~ /^&\s+(.*)/;
          blockquote($tab, $1),  next if $line =~ /^bq\s(.*)/;
          item($tab, $1),        next if $line =~ /^\*\s(.*)/;
          item($tab, $2, { value => $1 }), next if $line =~ /^\*(\d+)\
+s(.*)/;
          heading($tab, $1, $2, { id => idify($2) }),    next if $line
+ =~ /^([1-6])\s+(.*)/;
          paragraph($tab, $line, { class => 'author' }), next if $line
+ =~ /^by /;
          paragraph($tab, $line);
        }
      });
    }
    if ($inc == 0 && @toc > 3) {
      section($tab, sub {
        my $class = @toc > 25 ? @toc > 50 ? 'four' : 'three' : 'two';
        my $style = @toc > 50 ? 'font-size:smaller' : undef;
        list($tab, 'u', \@toc, { class => $class, style => $style });
      }, { class => 'contents'} );
    }
    $inc++;
  }
  
#  paragraph($tab,"written by $root_user", { class => 'author' });
}
[download]

No matter how hysterical I get, my problems are not time sensitive. So, relax, have a cookie, and a very nice day!
Lady Aleena

Thanks for letting me know.

Are these scripts called every time someone visits your website? Or are they part of the build process of the website?

If your scripts get ever more complicated it might make sense to cache the resulting HTML files rather than generating them every time dynamically. The script could check whether the HTML file is older than the input file and only then generate output.