I have moved to using 1 large instance, running in local host mode on a Windows 10 setup.
I setup VEP preferences for 20 midi ports (320 unique midi channels) and 32 audio channels (16 stereo returns)
Then I assign all cores except 2 I keep for the daw. So in my case, 18 cores per instance
This has allowed me to setup my favorite instruments and just call on them when I need them in my project by adding a midi track pointing to the the assocaited port/channel, rather than having 100's of midi channels and returns in a massive template.
I use one stereo return for each catagory: Drums, Piano, Strings, Winds, FX, etc. So, I might have 20 different VST pianos to select from, but they all play back on the same stereo return to Cubase.
I use XLN Audio Addictive drums hosted in VEP. I use a channel matrix plug to separate the stereo channels into dual mono and route that to a set of bus tracks. This gives me the ability to do whatever processing I want and then just return the drum master bus to cubase on one stereo channel. Works quite well.
I have also experimented with hosting FX send/return channels with VEP. It works so much better in VEP7. My need has not been as great since I run Waves SuperRack with Mercury. Although, I have demonstrated to myself that I could do everything I am doing in SuperRack, right inside VEP. Performance was very smooth in local host mode.
Anyway, my system has been humming along just fine since doing this, and my Cubase Project template is basic.