mulu:
Thank you for the recommendation of the PCA9685. I purchased a couple. That should eliminate my 2N7000 and the resistor that is between the Arduino and 2N7000, I believe. I will still need the NDP6020P, though.I agree that a N-channel MOSFET would make things easier. In my case I have LED strip lights in closets. These strip lights are controlled from a central location. So in most cases there are about 20-50' cable runs from the PSU/Arduino/dimmer to the lights. With low switching there would ALWAYS be 12V on the cable (well, as long as the PSU is on). With high switching there will only be 12V on the cable if the light is on AND the PSU is on. At least that is how I understand it. I know it's only 12VDC. If my reasoning doesn't make sense then please let me know.
No, can't remove the 2N7000 level shifter if you use a p-channel fet (high-side switching), because the gate of the p-channel fet needs to rise to the voltage of it's source (12volt) to turn it off properly.
PCA9685 output can't go above it's own VCC (5volt).
I understand your concern, but 12volt won't be a problem unless there is a ground near. e.g. grounded metal cabinets.
This page might also interest you.
Leo..