I've found it to be useful, too, to have individual items to cover all the variables.
What Ronald said is right. I've limited my use of Modifiers and Add-ons to variables that are not important to me to track. There's just not the tracking I want for them over the long run (but I see how they could be useful for something like pizzas).
In case you're not doing it, it would pay to become familiar with exporting inventory to Excel, adding your multitude of items there, and then importing it back into EZP. You can do it with your entire inventory, or whatever small section of it you'd like. It does seem a little formidable at first, but it gets easier - and then it gets to be indispensable!
Courtright is right in that if you want to get your inventory set up in a way that's going to be useful, you're going to have to spend some time with it. I've changed things significantly a number of times, as I figure out what works and what doesn't.
My latest modification I've done for your kind of situation is to use a series of 5 digits for the "primary" item, and then 1 or 2-character alpha suffixes for the variables within that item. It still gives me unique items, but lets us easily recognize that various colors belong in the same item group - kind of like taking Departments and Categories to a third level. The way EZP is set up, it's incredibly flexible with how you can work with your inventory.