Current loops of PCB design
You need to put the bypass capacitors as close as possible to the power supply pins on the processor.  If you are using an uninterrupted bottom layer ground plane (I assume surface mount given the -au suffix for the atmega328) assume the ground path is on the bottom and put a decent via very close to the ground side of each bypass cap.  Ideally there should be a physical flow ground plane -> via -> bypass cap pin -> processor pin, all as short and wide as possible.  Power should ideally be run in a star with wide traces but most complex boards end up a little more tree-like.

BTW, you'll need a current limiting series resistor for the LED and routing for the LED traces is generally pretty non-critical.