Alright, I got my instances running and each with its own windows service. Plus I do not get the white page of death, and I did not have to manually edit config files in order to make this work.
When cf instances are created, it creates a duplicate copy of the cfusion folder for itself. and so within itself there is also a runtime/bin folder which contains the WSCONFIG tool. So instead of creating cf connectors for my IIS sites using the main cfusion WSCONFIG tool I had to use each tool within each instance. Many of you probably already knew that.
It was recommended by Anit Kumar to enable the embedded server so that port 8500 is occupied before creating the instances so that the newly created instances do not automatically pick up port 8500.
Thanks to Anit who helped every step of the way and who got my server setup correctly.
For anyone doing a clean install on windows server make sure to run the installer with administrator rights. Plus make sure that your cf install folder has the appropriate permissions. I initially gave everyone full controll of my install folder then after it was setup and working I started to follow the permissions recommedations from Peter's CF 11 Lockdown Guide. http://www.adobe.com/content/dam/Adobe/en/products/coldfusion/pdfs/cf11/cf11-lockdown-guide.pdf
Adobe CF, could you guys add some tips and simple how to instructions to the instance manager page in the cf adminstrator? It should be know that instances have their own WSCONFIG tool and should be used for the intended sites. Also, I think additional instances should start with port 8501, 8500 should be left alone for the embedded server option. This could avoid setup issues. Oooh, also if possible in the instance manager add another action button that opens up its own WSCONFIG tool. Action can be called "Add a website".