Heres a crazy idea but might work.
Each station or switch (16 stations) has a programmable counter(dip switches). each station then has its own uniqiue code (number of out pulses from counter (4017 or ?).
The control room monitors the inputs, if that station has its switch closed then the control room reads how many pulses thus verifying that that switch is closed.
sounds crazy but could work . The DTMF is only good for 12 buttons anyway.
here is a novel idea that uses ONLY 4 lines from the control room to the 16 stations
used a cd4017 instead of a 74154 (no big deal same results)
the clock line sends out a continusious train of pulses at say 7 hz (just picked out of nowhere) to all the 4017s at all the stations.
each station is wired so when it clocks to that stations number the AND gate at the control room for that station is enabled but not until that station has a switch closure. The N/O montary switches need an RC network (capacitor/resistor combo) so the diode AND gate stays on for a few seconds. The flip flops keeps the data line high for a few seconds so the circuit keeps up. the 4013's might not be needed, depending on the clock speed.
the 4013 at the control station keep the LED indicator on. a reset line would add another line unless perhaps a gate that resets all the 4013's at each stationb but then the 4013's at the stations might not be needed as the 4013 at the control station stays on anyway.
circuit needs work but IMO a doable simple idea
If you're allowed to use resistors as well, you can do it in as many or as few wires as you like: even just one wire (plus ground). Simply wire each button up to a unique resistance value, and a quick ADC conversion will tell you which of the 16 buttons is pressed.