LDR with 7 seg display and PWM output

Yes, given I can now see the displays change intensity, before I move onto my larger project (large digits), I want to first breadboard the smaller 0.5" 7 segment displays and understand them fully before moving on.

So if looking at a single digit, I connect a current limiting resistor to each segment - based on R=V/I = (5-2.5)/0.02 = 125 ohms. The 5V supply I connect directly to the anode pin.

I assume for full brightness, each digit should be delivered around 20mA. As you said in an earlier explanation, when multiplexing 4 digits, the "average current" to each is a 1/4. I don't understand why. Is it not still 20mA per digit and only on for 1/4 of the time? I do however understand the "time on" is only a quarter and this results as you said to probably closer to 1/2 the intensity.

So would the aim be to increase the current to 4 x 20mA (if possible) to get back to full brightness?

I understand not blowing up the arduino and using transistors - I'll do that next. But what I don't understand is how to push the digits to the suggested max 1/10 duty cycle & 0.1ms pulse width. I think as I said I'm running at 1/4 duty cycle. So from the digits specs is this correct:

If specifications say 160mA max at 1/10 duty cycle @ 0.1ms pulse width, then mine run at 80mA could be:

=>160/2 mA at (1/10)/2 @ 0.1ms
=> 80mA at 1/5 @ 0.1ms
=> 80mA at 1/4 @ (0.1)x1.25ms
=> 80mA at 1/4 @ 0.125ms

If this is by any chance correct, now I understand the 1/4 duty cycle. But how do I achieve a 0.125ms on value for each digit (in multiplexing). The millis only works at a minimum of 1ms (1/1000th second). The above 125ms is an 1/8 of that. This would be 125microseconds. I'm confused. I'd appreciate your help here.