I have 2 lists where I want the selection in list 1 to be to choose multiple choices and open the second list to choose multiple options. The issue I have encountered is that the second list just stacks the lists on top of each other and there is no way of knowing which one applies to the different selections.
This is how it displays not
What I want is
Is your current outcome concatenating the "Option C" with the number as shown in your example? Or is the current more like what I show below where only numbers show in second (right) choice list with no reference to the corresponding letter? If so, rather than having the letter option stacked on top, you might consider the alternative at bottom where you end up with the letter options and the corresponding numbers concatenated together before presenting as choices. This idea may require an extra column in your SP list. If you are using lookup columns in SP list, these do not work with formula calculated columns, so somewhat of a headache.
Just maybe the idea will give rise to new thoughts on how to solve.