So, I use org-mode extensively for my daily TODO requirements. I am wondering if I can also use it effectively for note keeping. What I basically want is to store notes with tag
You can use a tag search (C-c / m tag1 ). Documentation here:
http://orgmode.org/manual/Tag-searches.html
This will create a sparse tree showing only the headings containing :tag1:, but it will not automatically reveal the contents of that heading as in your example.