Keypad matrices generally use X "input" pins and Y "output" pins for a total of X*Y switches. "N-key rollover" means each key has its own diode, so current cannot flow across the switch in the "wrong" direction.
#switch matrix shenanigans
lilac plinth
Multiplexing LEDs works similarly; each row is + and each column is - and scanning row-by-row (or column-by-column) means each position is individually indexable.
Charlieplexing LEDs relies on their directionality to allow a few pins to independently control a far larger number of LEDs than a traditional matrix.