Got it, so I changed the name of the file input from thumbnail to thumbnail[]. Then I wrapped the above paste in a function and added this part at the top of the file and it works perfectly:
if ( $_FILES ) {
$files = $_FILES['thumbnail'];
foreach ($files['name'] as $key => $value) {
if ($files['name'][$key]) {
$file = array(
'name' => $files['name'][$key],
'type' => $files['type'][$key],
'tmp_name' => $files['tmp_name'][$key],
'error' => $files['error'][$key],
'size' => $files['size'][$key]
);
$_FILES = array("" => $file);
foreach ($_FILES as $file => $array) {
//call my function
create_var_product($file, $post_id);
}
}
}
}