Okay, so after much headache and frustration, the solution was simple:
Under the P1 entry, scroll down to "Advanced Options" and enable split connections.
"Enable this to split connection entries with multiple phase 2 configurations. Required for remote endpoints that support only a single traffic selector per SA."
The sonicwall only allows one entry for the SA and get around multiple networks by accepting an address object that is a group of other networks. My scenario is literally this.
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