I had the idea of adding small led lights to the bit pieces and so wanted to present this idea to the community so anyone more familiar with electronics can offer some assistance. The idea is that when the bit points left the led is off and when the bit points right the led is on. Ideally the led would be situated in the center of the piece so the light remains stationary while the bit flips.
Hi Randy, I really like this idea of adding small LED lights. I’m going to talk to my boys about it tonight and see if they have any ideas. The light would have to be small and very light so that it didn’t compromise the bit in any way. There would have to be some sort of sensor too. I’m not sure how it would work, but it would make for a super fun demonstration!
I have seen teachers in the past use a post it to indicate on or off. It helps when you are first understanding what value each bit holds. Here is a video showing how it looks with value stickers: Binary Counter with Value Stickers - YouTube

you dont need any sensors just use them as swiches
you can put the led with two conducting plates inside of the arrow head thingie and two conductors through the boad where the two plates would be
just hook it up to some kind of powersource that is suitable and it should be good
Edit: I thought it would be hard to imagine so I drew a quick image on how the bit should look form underneeth (dont judge my drawing skills)

Could be made with a small 3v button battery with holder connected to an led and an appropriately positioned mini mercury switch such as this one from aliexpress:
Oooh this i really dislike, sorry. It would completely ruin this mechanical only board. If you start adding electronics, you will not stop and for me the purpose of the board would be gone. Among other things: It is teaching how computers work using mechanical parts only, add an LED and you add something that is not simple and can be understood by just looking at it.
For me it would really ruin it.
Keep it mechanical, completely, no batteries.
From the previous comments, it appears the use of LED lights isn’t practical for many reasons.
However, if the goal is to make the position of the bit more apparent at a glance, then a piece of bright tape or paint can be quite effective and simple to do.
Place a small piece of tape on the left surface of the arrow on the bit piece.
Cut the excess tape to fit the left surface and allow a little excess to fold over to form a narrow strip (about a 1/16 inch) on the face of the arrow.
The tape on the side will move to the top when ‘on’ and be very noticeable when viewed from above. In addition, the thin folded strip over the face will change from vertical to horizontal and the position will be apparent when viewed face on.
The picture I took is blurry, but even so, the on/off position is readily apparent.

By the way, since you have tape in hand, you may want to place a small slice of it on the top inner side of each piece of the stand. That way there’s no guessing which way to set it up.