We generalize our recent work on the optical bistability of thin films of molecular aggregates [ J. A. Klugkist et al., J. Chem. Phys. 127, 164705 (2007) ] by accounting for the optical transitions from the one-exciton manifold to the two-exciton manifold as well as the exciton-exciton annihilation of the two-exciton states via a high-lying molecular vibronic term. We also include the relaxation from the vibronic level back to both the one-exciton manifold and the ground state. By selecting the dominant optical transitions between the ground state, the one-exciton manifold, and the two-exciton manifold, we reduce the problem to four levels, enabling us to describe the nonlinear optical response of the film. The one- and two-exciton states are obtained by diagonalizing a Frenkel Hamiltonian with an uncorrelated on-site (diagonal) disorder. The optical dynamics is described by means of the density matrix equations coupled to the electromagnetic field in the film. We show that the one- to two-exciton transitions followed by a fast exciton-exciton annihilation promote the occurrence of bistability and reduce the switching intensity. We provide estimates of pertinent parameters for actual materials and conclude that the effect can be realized.