I know you can use ⌘+O to open a folder, however when you do that on an application it opens the application.
Is it possible to either make ⌘+O always show the contents or is there another shortcut for that?
I suggest that you create a custom shortcut in System Preferences → Keyboard → Keyboard Shortcuts.
This way you can open packages with ⌥ as a modifier key.
If you want a single keystroke to open regular items and regular folders, but show package contents for packages (including Applications), you can turn to Automator.
Create a new Service in Automator.
The service receives files or folders in Finder.app.
The first action is Run AppleScript. Here is the script:
The second action is Open Finder Items
Save your service. I called mine
Then, go to System Preferences » Keyboard » Keyboard Shortcuts » Services and assign a keystroke to the service. Unfortunately, I have not found a way to reclaim shortcuts already claimed by the Finder, so you may have to pick a keystroke other than ⌘O.
If you want to open the package in the same window, replace the line