Google is committed to the ambient display feature as the main method of alerting you to notifications on Nexus devices, but it's an imperfect solution. And indeed, some users simply refuse to buy a phone that doesn't have a proper notification LED. This year's Nexus phones both have an LED, and they offer a lot of functionality.
We were told by Dave Burke after the announcement that the LED would be an optional notification signal on the Nexus devices, and that apps would be able to make use of it. What we didn't know at the time was that there's a settings toggle in the Sound & notification menu (it's off by default). After enabling the Pulse notification light option, both the 5X and 6P will use the notification light for (I think) all notification. They are RGB lights, so they can display plenty of different colors.
So, the basic functionality just works, but you can also change the LED's behavior with something like Light Flow. We tested this and were able to change the color and pulse rate of all notifications. You just have to grant the app notification access to make it happen.
The Nexus 5X has an LED in the speaker grille at the bottom of the phone. It's big and very bright. The Nexus 6P has its light in the upper left corner of the phone next to the camera. It's not as bright as the 5X, but it's good enough to get your attention.
You can keep ambient display on with the LED or just use the LED by itself. It's great that Google is actually giving us a choice to use a notification LED this year, and you only need a third-party app if you want to customize the behavior.