OK, attached is a 7 segment LED display in the rough with resistors for the segments. If you wanted to display a 1 then segments B and C would be taken high through their respective resistors. If you want to display a 2 then segments A, B, G, E, and D would be held high through their resistors. The problem is you can't for example tie B & C together easily for a 1 then tie A, B, G, E, and D together for a 2 very easily. This is why 7 segment displays use decoders like the 7447 I linked to. Then it would be real simple to render a 1 & 2.
Best of luck with some form of switching matrix.
Ron