Combining multiple sprites

I would suggest an object pool pattern.

Basically, keep a large number of sprites already instantiated in the level, but deactivated. Rather than instantiate a new object (which you might be finding expensive), simply reposition and activate an object from the pool. You can then fade the opacity over time, deactivate, and put the object back in the pool after it's no longer needed.

As far as combining the sprites, you'll want to look at batching

if you use an image editing program, (ie. Gimp, Photoshop, perhaps even MS Paint.) You can put all the sprites on the same texture file. This will cause many of the draw calls to anything on that one texture file to "Batch." Which will save you processing power.

This is quite challenging task I suppose. I think of two options:

1) You can combine all the spilt blood into one sprite

2) Combine blood into one texture for multitextured (may be triplanar) terrain or something

The first way is easier to implement I think. If I were in your shoes I would try to combine all small sprites into bigger one changing it's texture dynamically by SetPixels method. Read texture of a small blood sprite by GetPixels, then calculate the offset for your big sprite and put there your change using SetPixels.

You can find the description of Set/GetPixels in Unity Scripting Manual.

I mentioned this post here