You can use the Light Flow app to fully customize any notification for any app including, color, how long it stays lit, the fast it blinks, etc. So just by the color alone, I can tell which app needs my attention.
I'm very surprised Apple hasn't implemented this in the home button. I think it would look really cool and be useful.
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Personally, I think that would be a slick implementation of it. Have the ring around the home button light up. Set the colors for the alerts you want or just don't enable it if you won't use it.