The integration of numerous energy storage systems (ESSs) improves the reliable and economic operation of microgrids but also enlarges the burden of control and communication systems. This paper proposes a cooperative hierarchical control for isolated microgrids with ESSs, which fully frees from the centralized paradigm and is therefore superior in flexibility and scalability. Firstly, the ESS cooperative control based on the distributed frequency controller is introduced for the state of charge (SoC) balance and the frequency regulation. Then, the ESS aggregation is considered. The aggregated ESS model is established and the real-time model parameters are derived by proposed distributed state observers. Finally, energy management is employed to allocate the output power between generators and the aggregated ESS. A detailed theoretical analysis of the dynamic and steady-state performance of proposed controllers and observers is provided. Simulations on the IEEE 33-bus and the 69-bus system verify the effectiveness of proposed methods.