I actually thought about putting some LED lights on my bike to make it more visible at night but just couldn't stomach how it made the bike look. I see cruisers all the time that have LED lights to light up the engine, frame, crome, etc. Personally I think it looks bad.

I don't think I have ever seen exactly what you are talking about with the rims lit up, maybe it doesn't look as cheesy I imagine it, but based on your reaction it does. I guess it comes down to personal taste, but I would rather wear a reflective jacket than rice out the bike.