Hi Tripecac.
The main reason why using multiple instances of Kontakt in a DAW is recommended, is that the CPU load is distributed more evenly through the CPU cores.
About the memory cost:
With 12 GB of RAM, I wouldn't worry too much. But.
Each instance of Kontakt (3.5) eats up around 30 MB of RAM.
So 20 instances for 20 instruments is definitely not an option.
But as bitflipper said if you separate the instruments into sections,
you can make it with 5 or 6 sections. Each in its folder.
This should be easily manageable.
About the CPU cost:
On a core2 Duo E6750 3 instances of Kontakt cause a CPU load of between 2 & 3%
I suppose this wouldn't even tickle an I7.
For the automatic tracks naming and the individual drum sounds outputs assigning, you can find a detailed description
in this page.
Best.
Sylvain.