one more thought, bear in mind you can get most encoder models with a built in switch, so you might not actually want an extra button beneath every single encoder? in general i don't see the use case for a direct conncetion/linear mapping between encoder and button? other than a main "data entry"/"preset" encoder maybe
also i am a bit confused as to why the position of the axo board would matter? won't it be underneath the frontplate, within an enclosure? you should easily be able to put buttons and encoder to whereever you hide the axo board in the back?
i think rgb leds do make a lot of sene in a step sequencer, you could easily indicate different trigger types/samples/velocities etc. or switch colour between banks etc.
another option would be to use illumated pushbuttons instead of button+led, saves you some frontplate real estate.