do these need to be separated into one seedling a cup?

It all depends on what you plan to do with them, I have grown cups with as many a six plants per cup. When I transplanted them I planted all six together, normally I did not have that many per cup, but more like three or four. Still I planted what was in the cup together in the ground. There are times and situations when you will want individual plants in the cups, or in the ground. I plant in all sorts of different ways. I currently have hundreds of cups with plants in them that have been there for months, and I do not recommend that. I just got caught with no place and no time to plant them. I will probably end up dumping them all, I just have too many newer seedlings that I want to get in the ground first.

As Larry said, it depends on when you plan to plant them in the ground. I have grown 3 to 4 seedlings in a cup that size for several months until I was ready to transplant them in the ground outdoors. I separate them when I take them out of the cup before transplanting. If the roots are really tangled, it is easier to separate them by washing the soil off. I do this by swishing them around in a bucket of water to remove the soil and then teasing the roots apart.

I think I will do as you suggest and just leave them like they are and plant them in the ground next spring. There will probably also be less risk of losing some of them by dividing them. Thank you both.

I think that's a good decision. I bookmarked this page a few years ago, it will give you a pretty good idea of how well thickly-grown daylilies can do.