diagon wrote:That device will work on 15.05.1, but it needs some patches for the LEDs to work.
I'm not familiar with this router, but are you really sure you need patches? Perhaps you just need the suitable 'kmod-ledtrig-*' packages through OPKG to control the LEDs and then create the LED configuration in "System -> LED configuration" to your liking?
I do know one thing which may require a patch or a new kmod-ledtrig package, and that is the 'Internet' LED that some routers have. I've been planning to write a new kmod-ledtrig package for this purpose, but haven't got around to starting yet 
diagon wrote:1) DL & install 15.05.1 & then patch? (Is that possible?)
As far as I know, it is not possible to "patch a running system", so to speak. You can always get the sources and build an image yourself, but in this case you'd be replacing the existing installation with a new one instead of "patching it" 
diagon wrote:What's the diff between sysupgrade.bin & factory.img?
A sysupgrade.bin is intended for upgrading or downgrading from an existing OpenWRT installation to a newer or older version or variant. This is usually done from "System -> Backup/Flash Firmware" section, or using the 'sysupgrade' tool from command-line.
A factory.bin is intended for use with a router that has OEM-provided firmware installed. It is essentially an OpenWRT firmware that just contains some padding and magic numbers to make it compatible with whatever image format the OEM-provided firmware expects. A "disguise" would be a good word here. Factory.bin is an OpenWRT installation disguised to look like an OEM firmware, so the firmware that is already installed on the router will accept it without complaining.
diagon wrote:2) DL & compile/install r49076 (right when the patches were added & very close to r49022 / 15.05.1)
If you use TRAC (dev.openwrt.org) to monitor these changes, then bear in mind that TRAC does not show everything. For example, if you look at the change history in the GitHub for Chaos Calmer (https://github.com/openwrt/openwrt/commits/chaos_calmer), you can see that the latest change shown in TRAC is not really _the_ latest change done to the branch. You can use text search to find the matching git commit.
diagon wrote:3) DL & compile/install something more recent?
This is always an option, and it is what I did for my router. I downloaded the GitHub Chaos Calmer branch, built an image for my router and flashed it.
diagon wrote:Any pointers to HOWTO's for patching/compiling would also help.
I first read through https://wiki.openwrt.org/doc/howto/buildroot.exigence and then created a 64-bit VM with Debian 8 to act as my build environment. After installing the listed dependencies and getting the sources, I followed https://wiki.openwrt.org/doc/howto/build to update the feeds and build it up. Since I already had a previous Chaos Calmer edition on my router, I used 'opkg list-installed' to get a list of packages that I'd need to tick from 'make menuconfig' to make my new image as close to original as possible.
diagon wrote:I'm a little confused about this firmware. As it's OpenWRT, is there some way to install it and then "opkg update && opkg dist-upgrade" (or whatever the OpenWRT vernacular is)?
There's no 'dist-upgrade' option. You upgrade an OpenWRT router to a newer or older version by using the 'sysupgrade.bin' images, like I explained above.