As far as baby-step projects go, first of all I'd leave the joystick alone, and just try to turn on single led(s) in the matrix. This would be to understand the led addressing mechanics. I don't know your programming skills, but the code you'll have at this point could be turned into one or more functions that you can reuse later.
A second series of test sketches would deal with the joystick. Learn how to detect a state change, turn that into some sort of "direction" information, etc. Again, you should be able to turn this test code into a couple of function to detect joystick "movements".
From here one, combining the two things should be at least doable.
My 2 cents.