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Should I just have one chapter 'alpha legion' or can I have more than one like alpha legion and black legion?

Everybody is the Alpha Legion.

It's your hobby, you can do whatever you want.

You can do a black crusade army and have each unit painted differently, you can make your own renegade force, you can do one legion, or any combination of the above. It really just depends on what you think will be fun to model and paint.

I have a Night Lords Army and a World Eaters Army. I can use them separately or together. If you base them all the same, you can mix and match them all you want.

I like the unified look of one legion, and I'm super happy with my Iron Warriors as a result. However, if I collected 2000 points or whatever I could see expanding into a new legion just so I could paint a new color scheme.

You can paint them as you like. Simply find a paint scheme you like and go with it.

After deciding on a paint scheme, purchase nine Obliterators

There's nothing wrong with having two legion together on the table, I know I'd have no fluff quarrels. Alpha Legion looks killer on the board!

Warbands, they all can be painted different if you want! CHAOS!

Yeah, one of the advantages of chaos is that there is no fluff reason you wouldn't get a whole circus full of colour in one band.

In fact, no matter what you do you WILL generally end up with a multicoloured army anyways, since all the kult troops have their own themes and styles.

I would strongly suggest you choose one unifying thing that sticks outs and binds your army together though. In my case for example, all the CSM have one black and gold shoulder plate with my own warband symbol on it. This, and the fact that I try to put some gold highlights on all my troops, makes them look as one warband while all looking completely different from each other.

Just do whatever you want.