This is an interesting idea. However, I feel like this could be better addressed by using an addressable chip like the ws2811. These can be chained for quite the distance and you will not get the inherent flickering that comes with the multiplexing approach. They even come in a standard LED form factor with one additional leg for data. This can all be controlled with a single digital pin on an arduino using a library…
That's cool too, but there's something awesome about seeing the whole circuit down to the multiplexing and discrete LEDs. Granted addressable LEDs like the ws28xx do pass data in a cool way, and allow awesome and somewhat easy projects.