Puzzled about Midi Channels

Something that has confused me for a long time: my sound card has one output, so I am limited to 16 channels. So, I can have up to 16 instruments in a single instance of, say, Play. I can set all 16 channels to a different pan parameter. Now, if I add a second instance of Play (or other VSTI), I can use different instruments. However, I am still limited to just 16 different pan parametrs, right? I know I can use controllers to force a change of pan, but there can never be more than 16 different pan parameters in effect at any given time, right? Remember, I'm limited to 16 channels on my soundcard. I can't seem to get this across to people on the East West Forum. They keep talking about multiple instances of Play. I get that. but unless I have an interface with more than one output, I'm only getting 16 channels. Sonar will default any pan parameter to the first instance of a given channel. For example, if flutes are on channel one, and I set pan to 68, and then I put a banjo on channel one, and set pan to 80, Sonar will revert to the pan setting for the flute. I could change it with a controller, but I would then need to change it back to 68 the next time the flutes play. Am I understanding all this correctly? If not, can somebody please enlighten me?

Thank you. Can I quote you to the EW forum?