Devraj,
Actually I think I used your first method. I had about 10 drag sources, some of the same type and some not and 25 drop targets of the same type to deal with.
The next approach I used was to group some of the Drag Source Objects ( like common parts such as multiple wire connector images, 4 in total ) but not group the Drop Target objects ( 25 rectangular shapes that make up the circuit board grid ). That did work successfully. I'm slowly getting to understand the way this drag and drop object type grouping works.
My next test is to Group the Drop Targets by Drop type that can accept the corresponding Drag type. Thus for my 5 x 5 grid of rectangles objects, the drop rectangle objects that are designated for a given wire connector, would be assigned a drop type of that wire connector. If this can work, it could save even more time, when setting the correct answers. i.e. I would just set the correct answer as a drag type and drop type relationship. I think this could make it easier if I had a really big grid of drop rectangles, as I won't have to specify every single drag drop object relationship. Not sure if that will work, but that's the idea I have in mind.