I have a client that has several thousand SQL Express instances at their clients, hosting tens of thousands of databases. Works fine, lasts a long time! :-)
Sounds like your .NET batching will work fine, and you can obviously build in a good bit of error handling, retries, notifications, logging, etc. And having your code run as a windows service installed with your app make it available to control it's own execution too.
Kevin G. Boles
SQL Server Consultant
SQL MVP 2007-2012
TheSQLGuru on googles mail service