First question:

Variable frequency is used to vary the brightness of a light or speed of a motor. You can 1. change the voltage 2. change the current 3. change the frequency.

Options 1 and 2 require a variable power supply or resistance. Option 3 a simple oscillator proves to be the most efficient and controllable.

For an example say a typical LED can handle 3.6 volts at 20ma max. I have a 5 volt power supply and need an indicator. I would use a 470 resistor with the LED and it will last for a long time. May not be full brightness but ... I can live with the loss of efficiency here. If I wanted full brightness I could calculate the exact resistance to get the correct voltage drop or pulse the 5 volts so the LED sees over TIME the correct voltage and current.

With a cluster it will depend on how many are hooked up either series or parallel .

Question 2

Why not use a timer (555) or a two transistor oscillator to control the frequency. If a CPU is needed for something else it could control the oscillator.