Am I trying to use a variable or pass a value by reference or by value?

The question doesn't make sense. The variable named set_on contains a single value. set_on + 3 is a single value. "it" is a pronoun with no referent, so we have no idea what you mean by "it". There are no arguments involved in using the variable set_on, except when passing it to a function. Which function are you referring to? Whatever function it is, you are passing the function ONE value when you use either set_on or set_on + 3.

I'm sorry for the confusion. I suppose by "it" I mean the compiler.
My questions could be better worded, but I am having a hard time with the programming language so I am augmenting my ignorance by trying to find a simpler code that I think I understand and modify it to do what I want.

I don't understand how to access or use the value after set_on in the program, or even how the button changes that value for that matter. I just see the number change on the LCD, so I know the button works.

I would like to use the set_on value as a time reference for my setpoint and addpoints in order to change the light intensity to different values based on time after sunrise "set_on" as well as turning the lights off at sunset "set_off" which I want to be 16 hours after "set_on" time

How to I tell the Compiler/Arduino to read the set_on value I am displaying on the LCD and use it to set the intensity of the LEDs via pwm pin(s) using the matrix (hour, minute, intensity)

If set_on is at 8:00 and I want the intensity at 0 expressed (set_on, 00, 0 )

Then, 30 minutes after set_on I can set a point which the intensity is 50% so that the lights fade up like a sunrise to a medium light level. i.e. (set_on, 30, 127)

Next, in the middle of the day, say 7 hours after set_on I can set a point which the intensity is 90% to fade the lights from 50% to 90% i.e. (set_on+7, 00, 230)

Lastly, in the evening say 14-15 hours after set_on (or 1-2 hours before set_off) I can set a point which the intensity is 70% of max to start the fade to sunset (0 intensity) at set_off or 16 hours after set_on i.e. (set_on+14, 00, 178)

With (set_off, 00, 0) or (set_on+16, 00, 0) turning the lights off as well as having a relay turn on and off the power supply for the LED drivers at set_on and set_off times

In addition, adding clouds by fading to a random lesser intensity at random times in between the predetermined sunrise, noon, and sunset points

This isn't everything you want, but it is a good demo. I wrote a library called DailyTimer, it is here on gitHub.

Thank you for going to all the trouble to write out a demo code to get me in a better direction. I will look over it carefully and try to understand what exactly you are telling the compiler to do and how I can add my functions.

Its crazy when I think about the 8+ years I have spent learning the Automotive industry and studying engineering which have a language, hardware and software of their own. To try and delve into programming, with its own languages and way of thinking, has proven quite daunting. I really appreciate you guys helping me out when I have so little knowledge, and even difficulty explaining what I want to do.