For a 5 man baseball team how would I find the average? Would it be total hits divided by total at bats or add up 5 averages and divide by 5?
I'd say use the average of the averages.
But, it depends on what you want. Not sure that a "team average" has any real meaning. Depends on how you define it.
If you average the averages, it decreases the importance of hitters who have been up many times, as their score is just one of five.
If you total the hits and at-bats, then players with few trips to the plate have less effect on the final result.