I use 5 instances on one computer, and I use both manual mouse control and software control for key broadcasting.

Basically, I have 1 character as a main, and 4 alts on my other monitor. If I need to interact with, or directly control, one alt, I'll use the mouse on that alt's window. Most of the time I'm just using mutliple WoW macros to control what the alts are doing. For my setup, I'm just using 5 WoW directories/instances, WoW Maximizer in each WoW folder, and AutoHotKey to broadcast keystrokes. Nothing is automated, so Bliz ToS is happy.

This is much more simplified than my current setup, but it's similar with my paladin/shamen:
'1' key is blank on the paladin, and for all shaman is set to "/follow Party1, /target Party1, /target targettarget"
'2' key is /startattack on the paladin, and left empty on the shaman action bars.
'3' key is consecrate on the paladin, and left empty on the shaman action bars.
'4' key is blank on the paladin, and for all shaman is set to cast lightning bolt.
When I press 1, all 4 shaman follow & target the paladin's target.
When I press 2, the paladin begins the attack on the enemy.
When I press 3, the paladin casts consecrate.
When I press 4, all 4 shaman cast lightning bolt.

I just use AutoHotKey to send each key '1', '2', '3', etc. to all 5 instances of WoW with 1 keypress.. that's key broadcasting.