Hi CluelessScot,
How is the course and project going?
Do you have any programming skills? With mechatronics, if you can prove programming skills in a project then it could be useful if for example, you went for a job in robotics (design/maintaining/commissioning, etc). It is all about logic.
A project relating to a hobby is a good idea because it gives you plenty of motivation to do a good job, but if possible then try and show other uses for the device in your report and put an industrial spin on the project.
I did an ONC project once, it was a box which accepted analogue inputs from process control instrumentation. The inputs could connect to pH, conductivity, temperature, redox, anything that used the 4-20mA standard (instruments not the sensors). I wrote a bit of software which displayed the readings on a computer. It was a simple data aquasition device. I was working for a company that made instrumentation for analysing chemicals at the time so it was ideal but it (or something similar) could quite feasibly be used in this hobby.
Controlling LEDs would require a digital output (i.e. a constant voltage that is on or off). A water level controller would require a digital input (i.e. send a current out through the level switch and detect it returning when the switch closes) but the valve(s) which it would control would require digital outputs (assuming they are solenoid valves), and they could be the same digital outputs (check voltage though) as the one which controls the LEDs (so you get your LEDs and put a more complex use in to the report).
You could perhaps provide an analogue output and control a positional valve to vary, and not just shut off, the water flow. You could then analyse and talk indepth in the report about the valve (stepper motor) intself as well as your circuit. Again, in the report talk about how the valves use the same type of stepper motors that are used in a variety of other things such as robotics, which are controlled in the same way.
There would need to be a way of programming the logic inside to say for example - this digital output is being used to control LEDs so must be permanently on, or comes on at this time and off at that (but then you need a real time clock too), where as the valve would be activated depending upon the state of the level switch input.
How easy you could make the logic to the user would depend on your programming skills. But you could make it a black box, with dedicated inputs and outputs and no user adjustment of logic or preset variables (i.e. water level, time, etc).
I've mentioned robotics a lot, but that's what I mainly think of with mechatronics.
Good luck with it all!