I had this issue, but finally got the help I needed. Here is what a couple of Presonus support persons told me:
"Direct inputs should not be used unless you are performing live. You also need to have "Monitoring Follows Selection", in settings options list found when you click on the screwdrive icon at upper-left above tracks, to make sure that each track is only heard on its own when you play it."
A: First, you start with one instance of Kontakt. Load an instrument for it, and you will see it automatically assigns the "MIDI Channel" for it.
B: Click on "Instr." in the lower left corner of Studio One, and a section will open up to show the instruments - you will have Kontakt listed, and the first channel "checked" - "Kt. St.1 - Kt. St. 1".
C: Add as many "Instrument Tracks" (the automatic "Instrument" option), and load your instruments in Kontakt. For each of these tracks, you need to repeat "B", so it will connect with a channel.
D: Now, open the vertical size of each track, at the beginning left, and select "Kontakt" and select the track's "Channel" number. and below that select your "Instrument Input" (midi, etc.).
As for setting up each instrument, please see the screen capture I have attached and you can see how I have things associated.
You need to open up the "Output" section in Kontakt (from the icon to the right of the "KONTAKT" name in Kontakt), and then click on the "+" to find a menu where you can add outputs ... stereo, etc., for as many as you need for instruments).