Can InstancedStaticMeshes have individual collision/hit events and if so, how do you enable it?

Right, which is what you have to do because the instances can’t interact.

Luckily, the extra invisible collision meshes don’t seem to affect performance so it is a perfectly viable solution.

For more information you can see a Dev’s advice in my Map Generator thread:
Map Generator- Please Critique! - Blueprint - Unreal Engine Forums!