because led's that are bright enough to illuminate stuff underwater are expencive.
1W leds are only about $3 each.
My 8x8 true colour display using 24 74HC595's will give a good indication of how well artificial PWM works.
I intend to do a tight loop switching them on and off as quickly as possible.You could use multiple controllers.
The Arduino for controlling the robot and another one for doing PWM.A better idea than relays is this.
A 8 channel IC for high load stuff.
http://www.makezine.com/blog/archive/2007/09/make_a_pocket_led_cube_we.html
that might help you