Efficient way of controlling many LEDs
Another possibility is to use addressable RGB leds, based on the WS2812 or similar.  This is an RGB led with a PWM controller built in. They can be bought in strips, or individually.  These are very popular in the Arduino community. (Search on NeoPixel or APA102.)  You can string a very large number of them together serially, and then control them with two output pins on a microcontroller.  Depending on what you get, you may need an external 12v supply.  But you have multi-color capability, which might help for indicators.

A possible downside is that if you microcontroller goes off in the weeds, the LEDs will continue to display their last data, which could be a safety concern.