That number came from derating the Rds(on) to 125°C, as a conservative estimate.
I am using a driver. I was wondering about whether to control the gate with 12V or 5V, but the article answered that question.
I'll probably just go with a bunch of AAs.
I'm not using the LED as a regulator, I am using it as a diode, but with an indicator for power. I remembered just now that I'd just end up blowing the LED anyway because I'd be pushing nearly 1A through it. I have a 7805 5V regulator already.
I'm not building the PCB yet. I am actually waiting for a few parts still. The layout I uploaded is what I designed for etching after I test it out.
For calculating the Rth, you just make a big enough heatsink. The entire enclosure will be part of the heatsink. Also, I would simply use the thermal resistance of the base material. I can get that from the specific heat. Then, a little math with surface area and the conductivity of air and I arrive at the thermal dissipation rating. I know I need 5W dissipated, so I make a heatsink capable of dissipating 10W.