Hm, I was going to suggest that you look for GPIO expanders, but the devices you want to use are a bit more... exacting.
Let's start with the easy stuff. Five pots, no problem. MCP3208 or something will clean that up easily. 8 channels of 12-bit analog input is more than enough for reading a pot. You could also do it digitally via a rotary encoder, depending on your application, but if it's audio, pots probably make more sense. I personally prefer i2c adcs (takes up fewer pins, and the Pi is very pin sensitive for big projects), but i2c adcs in a through hole package are basically non existent. If you're comfortable with surface mount parts, then I'm sure you know how to find the adc that's right for you. But if you aren't, then you're stuck with the SPI parts from microchip, because microchip is one of the only companies that sells almost ALL its stuff in dip packages.
Pushbuttons with LEDs - you can buy the buttons with LEDs built into them, but make sure you know where the current of the LED is coming from; the Pi can't safely drive an LED directly. If you don't need a lot of speed on the buttons, I would recommend you offload them to a GPIO expander http://www.raspberrypi.org/phpBB3/viewt ... 44&t=45258
because 8 buttons is quite a few for the Pi. However interrupts will be a lot more annoying if you take them off your main pins, and polling them is much slower, so it's a tradeoff you need to keep in mind.
MIDI - you're probably more familiar than me with this interface, but to be plain, the Pi doesn't have any onboard support for it, and I personally doubt you'd be able to run it off of GPIOs; audio algorithms always seem to need more speed and timing that only a real-time device can provide. Your guess is right - USB is definitely the easiest way to do this
steppers - this is the type of motor I'm not particularly familiar with. Lots of stepper driver boards exist but idk how they're controlled or addressed. I'd start off by looking on sparkfun.
display - a simple 2 to 4 line character display can be found on places like adafruit for a fair price. They throw in the soldering work to connect it to an i2c GPIO expander, which reduces the pin consumption of these devices. Libraries also exist, I know lots of people on these forums have played with these, so getting started should be a breeze. If you want a graphical/TFT type LCD, that's a bit of a steeper challenge, but it sounds like you're not aiming that high, so I won't go into it here.
Slaving a microcontroller to the Pi is a pretty big allocation of resources imo. You have to program another device, and worry about organizing comms between the Pi and the micro, which I would definitely want to do over a standard serial bus (i2c/spi/uart) and NOT over USB, because USB ports are even more precious than GPIO. There is one undeniable advantage to adding a micro though; you can compress a lot of these parts into one. A typical pic/avr will have a fair number of 10-bit adc lines for those pots, and it'll have enough GPIOs to handle those buttons (plus direct current source/sink for LEDs). If you already know your way around a microcontroller that's suited to this application, it might be a good solution as well. But if you don't, then that's a whole extra platform you have to learn, yada yada, that takes time.
One thing is for sure - existing expansion boards for the Pi will provide the features you want, but no one board will provide all of them, and I'm doubtful of the ability to stack boards to the heavens on the Pi. This is probably something you'll have to roll yourself.