arduino controlled LED stairs using softpwm

I'm looking at putting some LED's up my stairs and thinking about using a ATmega328p IC to run the 14 channels I need. I will also need a couple of digital inputs for sensors so I might set up the analog inputs as digital. This should keep the project really cheap and be quite simple for me to get going.

Any suggestions / issues doing it like this?

If you need more PWM outputs that the '328 has natively then consider using shiftPWM: http://www.elcojacobs.com/shiftpwm/

You can have dozens of LEDs with 256-level PWM control using only 3 Adruino pins and '595 shift registers, which are cheap as anything.