When it comes to RetroFE, it is important to remember that, contrary to many other front-ends, the meta XML is only used for the display of additional information, and not for the population of the game lists. The game lists are populated by the following files and directories:
- menu.txt (containing collections)
- include.txt (containing games that should be included)
- exclude.txt (containing games that should be excluded)
- roms directory (selected based on the extension defined in the settings.conf file)
For more details, see the wiki.
All in all though: you can use 1 XML file containing all MAME games for all arcade collections, and simply use include.txt files to fill the game list of each arcade collection.