1. Yes.
  2. Depends. Each of the 20 IO pins can control 1 LED, maybe 2 in parallel or in series depending on the LED. Or each pin can control a transistor driving many, many LEDs at one time up to the limits of your power supply and the selected transistor. Or you can use a chip that control 64 LEDs individually and use several of them, or use that chip with external transistors so it can drive many LEDs at one time up to the limits of your power supply and the selected transistor. Lot of options. You need to make some decisions about how many amp-hours of battery you want to carry, what voltage, a budget for parts (more complex parts = smaller number of controlling parts but more money), etc.

Summary: 400 is a ton of LEDs for a wearable outfit. I created a mobile suit and from experience I suggest you consider how long the system needs to run and test power usage early. Battery power can limit how many LEDs you want to use and/or the brightness / type / current needs of the LEDs selected.

Knowing how many you can feasibly run from a build and battery perspective will help you "back into" the actual design with a known working led count.

If you design and build a shirt with 400 leds and then find out the best battery you can afford only runs it for 10 minutes that would be a shame, so be sure to give battery power a major consideration early in your design.

Best of luck, looking forward to videos :)

On that note .. here are some "pretty bad" videos of a suit we threw together literally starting 2 weeks before Halloween last year. Playing with the music - on Halloween .. http://www.youtube.com/watch?v=jahAUSMOegE http://www.youtube.com/watch?v=hz3coGgFkM8

Dark video showing the die hard being plugged into the chest and lighting suit - just like the real thing, lol. http://www.youtube.com/watch?v=KCDccfOkOI0