If I do that and select to start the snapmirror update process will that trigger SM for all the volumes?
yes it will.
the default behaviour for a job pointing to datastores is like this:
it will lookup the VMs in this datastore. if it finds VMs with VMDKs on other datastores it will automatically include these other datastores in the job, and it will create snapshots and snapmirror updates on these additional datastores too (I think this is called 'spanned entities' in VSC 4).
so if you have a lot of VMs which are distributed randomly over datastores, then do one job for all of them. otherwise you will find a lot of snapshots on the volumes from all the different backup jobs.
if you have a system how the VMDKs are distributed (i.e. one datastore for system drives and one for datadrives), then group those datastores in one job and make a job for each group.