DNS Alias for SQL Instance - LOTS of Instances - All going to default instance
Below is what i've setup so far, I'm not sure what is causing all of
  the aliases to connect only to the default instance but the normal
  connection (server1\inst1) works fine. It seems like it should work.
  What am i missing?


You're allowing Named Pipes connections to the default instance:

@@Servername=Server1, @@ServiceName=MSSQLSERVER 
SQL Auth: Net_Transport=named pipe; Auth_Scheme=SQL  


You need to turn off Named Pipes if you want to control connectivity through specific IP addresses and ports.  It's only the default instance that listens to the \\.\pipe\sql\query pipe. Named instances will listen on a pipe called \\.\pipe\MSSQL$SOMEINSTANCE\sql\query.  And all the named pipes are available on all the IP addresses.

So basically in your case, the client is connecting to 

\\INST1\pipe\sql\query

Which is the default instance's pipe. When a named pipes client connects to the server without an instance name, it will always connect to the default instance's pipe.