"It's such a pity that we don't have more time for sightseeing!" said the old lady.
should be paraphrased as
The old lady said she wished they had more time for sightseeing.
............................ they had had more time for sightseeing.
"The old lady said she wished they had more time for sightseeing".
I thought wish sentences were like unreal conditionals (second and third) and that when reported speech is added, it becomes Past Perfect...
"I wish we had(Past Simple) more time..."
She said she wished they had had (Past Perfect)...
Where does the rule of sequence of tenses go then?
Perfect can be backshifted to past perfect, and present to simple past - where appropriate.
Sorry for being such a nag, but do I understand it correctly,
"The old lady said she wished ..."
is not an example of wish sentences, to which the rules of conditional sentences (unreal condition) apply?