MSGEQ7 not reacting to Audio

No. In both circuits you have the transistor/MOSFET directly between +12V and ground. When the transistor/MOSFET turns-on, current flows directly through the transistor/MOSFET, essentially shorting-out the power supply, and "pulling" down the power supply voltage to (nearly) zero and drawing excess current. That can fry the power supply and/or the transistor/MOSFET.

The LED is also connected directly between 12V and ground, so it's always on (at least until the transistor/MOSFET shorts-out the power supply).

The LED needs to be in series with the transistor/MOSFET, so that any current that goes through the LED has to go through the transistor/MOSFET too. With the two devices in series, when the transistor/MOSFET turns off no current flows through it so no current can flow through the LED either.

...I gave you a link to a driver circuit. Did you miss that?