I think you have to set that in the dip switch settings for each game that supports it (someone correct me if I'm wrong).
I can only re-enforce that you are correct. you have to do all the dip switch setting for cocktail screen flipping mode by hand. I don't think that is too much of a burden though, you will want to go through and check each game anyway, as some of them do not work properly in cocktail mode. (ie, even though the screen may flip, player 2 may be unplayable or graphics may be corrupt)
IIRC, I worked through my cocktail machine's list of games in a long afternoon. it is work, but it's also fun to see them.