Yes, that is unfortunately a long standing complaint.
My solution (which I use for TV shows anyway) is actually 2 solutions.
1. I delete all season numbers, but the episode number becomes 101,102 etc for season 1, 201, 202 etc for season 2 and so forth.
This works fine and as the cursor will jump to the first blue dot in the series, it keeps me up to the latest in watching them.
However, when a TV series runs for 10 years or more, you can no longer do this as episode numbers can ONLY have a max of 3 digits.
So solution number 2 is:
Totally sequentialise the episode numbers, with no breaks. But in the episode ID field you have more liberty in what to put. Here I identify which season and episode it really is.
Obviously I do this AFTER metadata has been added.
Also, if I ever need to revert to correct field numberings in episode and season, its a very fast thing to do in iTunes. So if Apple ever decide to fix it, and I do mean fix because they had it right on the Apple TV1, I can easy revert to the correct way of doing things. (And yes I know ATV1 was based on TIGER, since then its iOS)
This presents me with 1 TV Show entry on the ATV menu system, though when its like 14 season long, a hell of a long list is within that. Thankfully, as I mentioned, the cursor jumps to the first unwatched episode.
As a side note...for TV series's that are still ongoing, I leave the last season correct until that season is finished.
Oh, and also...to make it SUPER easy, get a DOUG SCRIPT called Increment Tag Numbers....does the work for you within iTunes.