Model Train Signals - need to control many LEDs

I have managed to write a sketch for my Arduino Uno that controls a traffic light system based on the input from a IR collision detector. I plan to build signals for a model railway.
The programming/prototype works great. The only issue I can foresee is the current limitation of 200mA on the UNO.

The project currently uses 4 standard LEDs (220 Ohm resistors in parallel) for each signal, there is an output pin for each LED and the code does the switching ON/OFF.

What is the best way for me to incorporate more signals from one Arduino UNO board?

Do I set up transistors to do the switching while feeding a separate power supply to the LEDs?

Do I investigate shift registers with a separate power supply to them?

I am very new to the Arduino and still learning about the fundamentals, so apologies for the lack of detail in my questions.

Any help or suggestions would be very helpful at this point, so I can continue with my fiddling!
Thanks in advance for your help.

What is the best way for me to incorporate more signals from one Arduino UNO board?
Define 'best'
Do I set up transistors to do the switching while feeding a separate power supply to the LEDs?
Sure.
Do I investigate shift registers with a separate power supply to them?
Yes.

Have you seen the Arduino Mega?

Thanks Larry, I was thinking of buying the MEGA.

I have some PN2222 transistors.

Assuming I power 1 LED, via 5.5v (seperate to arduino) with 220 Ohm resistor and have the arduino providing the signal to the PN2222 transistor (ALL with a common ground), what would the transistor need to operate in terms of mA?

I just wanted to know how may sets of signals I could run without exceeding pin current and overall current.

Note, modern LEDs can often be bright enough with 5 ma flowing through them.

If you use transistors to drive he LEDs, the Arduino will not have any problem with suppling transistor base currents.

See Q1 and Q2
Outputs.jpg Click on the image for full resolution.

I've used shift registers up to 6 of them to control LEDs using them as signals for my model train layout.

How about use ULN2803 etc... It can drive up to 500mA per output.

How many LEDs do you need? This board I offer has up to 12 TPIC6B595 shift registers to control up to 96 LEDs at 150mA each (so you can multiple parallel LEDs on each output, or strings of LEDs if you want to use a higher voltage source).

There is a '328P bootloaded as an Uno on board. Plug on an FTDI Basic for downloading code.
http://www.crossroadsfencing.com/BobuinoRev17/