I have been following this discussion with interest since I would also like to have bays and straits represented by some sort of polygon/area instead of just nodes. However, I also agree that having overlapping relations containing hundreds to thousands of natural=coastline ways would tax many data users, and be prone to getting errors from mappers who edit coastlines.
As a sort of compromise at least for bays (gulfs, inlets, fjords, coves), how about we just map them as a single way across the mouth of the bay and not as a way-polygon nor type=multipolygon relation? And then we set the direction of the way such that the right-hand side of the way points to the bay-side (just like the right-hand side of natural=coastline ways point to the seaward side). I know that some people would not like this at all because this is mapping an arbitrary and fuzzy water boundary. But this avoids creating overlapping relations and reduces the technical problem to just maintaining a single way per bay. And for map users and renderers that care about the polygonal extent of bays, either for labeling purposes or other applications (like calculating approximate areas), constructing the approximate polygon for the bay is an easier GIS operation (just concatenate that single way with the adjacent bay-side coastline ways) than trying to guess that polygon from a possibly poorly placed node. If people think this is a good idea, we can even extend this to straits: just map the ends of the strait with two such ways and combine them into a relation and tag that relation with natural=strait. (At least this relation will just contain 2 or a few simple ways instead of also including many coastline ways.) I guess we would also need to have a new type=* for these relations, perhaps type=water_extent or something else?
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