@Sean389
Yes Sean, that is exactly what is happening! You only have one listing so, when someone books that one listing, whether it's for 1 or 10....that is it, nobody else can book!
What you need to do is, in addition to your whole host listing, set up additional listings for each room and give them a different title....the blue room...the red room....the room with a view!
You can use the same generic photos from one listing to the other but this will allow you to accept multiple bookings for the rooms you have available.
The only thing you have to do once you have set up another listing or two is to go to 'Availability' on your listing editing page and scroll down to the last item which will be 'Sync Calendars' and set your listings there so that you do not receive multiple bookings that you can not accommodate....that will clash with other bookings!
I hope this helps Sean!
Cheers......Rob