Sorry i would if i could but the best camera i have is a 5.1 MP so its crappy =[
5.1 Megapixels is a good resolution, it is 2592 x 1944 (bear in mind that HD resolution is 1920 x 1080), I had a 2 megapixel camera that took fantastic photos. The quality of the lens and image sensor are the biggest factors. If you want to do close ups you need it to be in 'macro' mode, or take a photo from far away and then crop it. Your photo is bad purely as it is not in focus.
Generally, point-and-shoot digital cameras have an orange light that
flashs as it is focusing, and
remain lit when it is focused.
On topic, is the rectangular plastic attached to the LED, or part of it? If it is the later then I guess it is an OEM part. In this case you can get a regular LED and bodge something to carry the light to (I guess) the slot in the case.
Hope that helps, Doug.