Well, the sheer number of audio inputs is demanding of resources just having them connected. Then you're doubling that on the same cable, it's no wonder you aren't running that. Also, take very seriously the advice about proper ASIO drivers.
I hadn't imagined such a dependence on Cubase native plugins. Using MIR in VE Pro, you can have all the placement you want but assigned to a few busses since it isn't about stems.
For me, I'm not you, this is a million miles from optimal. If you really have to go with Steinberg's plugins, certainly I would go with MIR in Cubase to get rid of hundreds of channels over the network. NB: the primary real-world reason for outputs from VE Pro is stems. Look at the manual for MIR Pro and note the pictures of everything to the master bus. There are reasons to have more than that and you have indicated some, such as sending to MIR separately. I'll separate things in order to send to the other instance of VE Pro with a lot of reverb, and did with MIR as I'm assigning more threads to the FX type of instance which can use more.
I do little to nothing with the Cubase mixer as far as the VE Pro channels, the Cubase channels sit there at unity. I automate the VEP channels. The instance I'm looking at ATM has 27 channel strips which sends four stereo outputs to Cubase. When I was demoing MIR Pro, a typical setup might have two [output] busses, a room bus [MIR] and a [MIRacle] tail bus at the master output. There is no loss of flexibility, it's just lean and efficient. It can all be mixed completely individually, just 'grouped' as far as the output. I come from a recording studio paradigm and I rather abhor a hundred outs, it's just nuts to me.
I use [a plugin in] Cubase for when I want to record live tweaking of parameters rather than write them in the lane. For me, with the mapping of parameters VE Pro is the superior mixer, it's all laid out in one place, and because of the control I don't have dozens of instrument channels in Cubase. I have a high number of automation lanes which is more meaningful to me and to me it's less clutter. I think 'more optimal' for you means MIR in Cubase.