the 1-2- both switch provides you with the most flexibility. Leaving it on all allows all your house banks to act as one large bank, which is recommended by the experts as the best way to discharge and recharge a battery bank. You get more time to run batts down and they charge up faster when combined, rather than in individual banks. You could also, of course, operate bank 1 as the house bank, leaving bank 2 in reserve for the next day and alternate banks. This way if your bank 1, for example, is severely run down after a day or 2 on the hook, you can remove it from service to allow the engine to run full power when weighing anchor and motoring out of an anchorage. The draw on the alternator would be pretty heavy at 100 plus amps and would overwork a small auxilliary. Once you left the anchorage you could switch to "Both" and allow the depleted bank to start getting recharged, then after a while switch over exclusively to the discharged bank to get full charge benefit from the alternator. Just my take on things-- lots of ways to skin this cat!
As long as you have that extra starting battery isolated and remember to take it off line whenever the engine is stopped, you'll always (theoretically) be able to start the engine to recharge the house bank(s).
As for monitoring, all you really need is a monitor for the house bank(s). The starting battery can be hooked up to a simple (read cheap) digital voltmeter that will tell you its voltage, which is all you need to know about that battery. I use an Optima red top for the engine start battery and it has lasted for 8 years and is still going strong. This is also the battery I use when operating my windlass, as the windlass draws high amperage, but only for a short time-- exactly what a starting battery provides.
Rodd L.