How to digitally "amplitude modulate" an LED
I think the easiest route would be to use a linear technology PWM chip - I'm thinking of the LTC6992: -



You choose a resistor value that sets the PWM frequency and your control input (from your audio) would feed the MOD input. Make sure your audio is conditioned to be centred at 0.5volts thus allowing the signal to produce 50% mark-space ratio when audio level is quiet.

Also make sure that you don't go into clipping situations when the audio level hits 1Vp-p - you might want to use a pot to ensure you can't overdrive the chip and also double check what the absolute maximum ratings are in case you do.

The output is obviously a square wave (mark-space modulated) at between 0V and 3.3V - this should be fed thru an appropriate circuit to drive the LED. I can't give details because I don't know your LED power requirements.