I was using normal LEDs as indicator lights in my projects for years, but when I discovered individually addressable RGB LEDs the possibilities exploded. Individually addressable RGB LEDs can be daisy chained and controlled with a single microcontroller pin. Each light in the chain can be turned on and off, dimmed, and can combine 256 levels of red, green, and blue to create boundless colour combinations and animated effects. The ones I use most often are called WS2812 (sometimes people call them neopixels which is the name given to them by the wonderful company Adafruit which designs and sells electronic components and supports the community of electronic makers). They can be purchased as strings which resemble christmas lights, in strips, in various other shapes like rings, or individually. They require microcontrollers to control them but with libraries like the Adafruit neopixel library or the FastLED library you can make them do anything you can imagine. There are versions which run on 5V and others that run on 12V but the 5V version is great for portable battery powered projects because you can use a USB battery pack (the kind used to charge phones) to produce the regulated 5V which also powers the microcontroller.
For some non-battery powered projects I use the same lights with a Falcon F16 controller and a raspberry Pi and sequencing software called Xlights for larger displays and matrices.
