Well I don't know how to easily do a couple of those options but what would probably be the most compact solution that still includes PWM? I thought of shift registers but I have never used them before, would i use them to control the columns and then by just changing the ground on a single row, i could control an individual led; then I would just use multiplexing to light up multiple columns? Wouldn't I need a bunch considering that I would have RGB LEDS, so 3 shift registers per column or am I over thinking this?
Edit* I was taking a look online at what other people did for making a RGB Led matrix and I found this: 16x8 LED bar prototype - Processing + Arduino + 2x Rainbowduinos - YouTube
Would that be something that could work? I can get a couple Rainbowduinos if I need to, but would that be an easy method to setup?