Yes. The contract information is specified with the symbol properties (right click on a symbol, select Props). So if you were watching XLF, and had your eye on the front month 28, 29, and 30 calls and the 25, 26, and 27 puts, you'd have to set up 6 symbols. Double that count if you wanted to watch both front month and front month + 1.
This is a bit cumbersome to setup and maintain, but it kind of has to be this way for one big reason. What if you were getting option data from OpenTick and then submitting an order through IB. We need to have a way to abstract contract details between the two providers. Everyone seems to specify contracts a bit differently, so this is why we've set it up this way. When we add automation features to the watchlist, this task could certainly be automated.
Bill, can one currently buy and sell options through RE? That is, does the PositionOrder object have elements for specifying option details such as expiry, strike, multiplier, etc? Can bid and ask be accessed in a stategy? (I can foresee a case were you trade an option real time although you have no historical data for it -- just like is done using TWS manually.)