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Does mq2 limit the amount of instances of eq that can be run on a core to 4? If so can this be changed? I have a quad core processor and seems I can only run 16 instances of eq.

Your issue is most likely limited by one of two factors:
1) Ram available
2) Lack of usage of Eqwire
I've had over 60 accounts up on my machine before (more then 4 per core)
I7-5930 plus 64 gigs of ram....
With 16 gigs of RAM, I was able to get up to 24, but I had to turn settings down drastically.