Hi,

For debounce you can add only a delay of 10 mSec. that would be enough.

Use a good quality switch or a set reset type F/F so won't need a debounce at all.

Yes that's the solution by illuminating the LED with pulsed output with appropriate duty cycle.

But just think that only to illuminate an LED you have to allocate a timer interrupt (or some other code work) for just an LED.

This might disturb your main code.

By the way what makes you run out of pins ??

Simon