app.config is mainly the application's configuration. It does not stand on its own (excluding some configuration data that is stored in app.config for design-time development things like connection strings and such).

Eventually when you run your application, be it a web application or a windows application (WinForms, Windows Service, etc) it can user either a web.config or an app.config respectively.

I am not aware of a Microsoft tool that can do what you want, but there is a tool called XmlConfigMerge which is a nice tool (with source code) that can merge configuration files.

This might help you during the production of your application or during deployment.