Ok, I do not know where MAME stops and the FE begins.
You really have three different things that can be going on. (Without knowing if you are familiar with the previous version of Johnny5, etc).
1) You can modify MAME so the it sets DRS modes correctly, sets LEDwiz lights, calls Johnny5 on pause, etc. This is where MikeQ was going with PowerMAME, but it's pretty difficult even with an app that isn't re-written every six months or less.
2) You can setup your frontend so that along with launching a game, it also sets the correct DRS modes, or monitors for certain keypresses, etc. (GameEx does a little of this, but most FE's don't do this.).
3) You can use third party software that runs in the background and does certain things when certain keys are pressed. These can be launched by (most) frontends prior to calling MAME. (Howard C's AutoHotKey script for Johnny 5 and SirPoonga's DRS modes software would be examples of this.)
1. Are the PM extras like running a LWA when there is a coin up, or qbert knocker, something that the FE can handle or is this strictly MAME?
Typically neither. MAME normally would not do this until MikeQ modified it. Most FE's are not going to support it. What you will likely see is Aaron Giles seems to be pretty determined to fix the output (LED's (specifically 7-segment LED's), lighting in Beatmania, possibly force-feedback down the line, Q-bert knockers, lighting events (Weapons Van light in spyhunter)) side of MAME.
When this happens, it will be easier to write specific third party software to watch for these event triggers from MAME and act on them.
You can see this in 0.108 with the keyboard LED's which are now run off an external program rather than from inside MAME.
2. Is Auto DRS select (for the 49ways) doable with the FE?
Yes - with GameEx, it can be done inside the frontend, however it is usually done outside the FE with SirPoonga's app. See
http://www.mameworld.net/tigerheli/set49mode/Is it like the LEDWiz in the fact that MAME broadcasts the game that it is running and you can use that to also select which DRS mode to use?
No, it is not quite like the LEDWiz in that rather than having SirP's app running constantly and listening for MAME to launch so it can get the rom name, you simply call SirP's app and pass it the rom name when your FE launches a game.
In PM in the user interface (within MAME) you can change this. I understand that to be a MAME thing, not a FE
thing.
In PM it is a MAME thing, but that is the only time it would be and only b/c MikeQ coded it that way.