While this can be a lengthy response, I'll cut it short and say, maybe. You need LED bulbs designed for AC. While some LEDs will work, it's not guaranteed. Some LEDs are designed for cars, boats, and RVs, which are sometimes AC. Most LED are designed for DC.
There are ways to get around this, like running an inline AC to DC converter, using the 12v DC from a switcher, or just using AC LED bulbs.
As for the spotlighting of the LED bulbs, there are multiple ways to fix that. If it were me, I'd start by cutting a small circle or square from electrical tape and putting it over the end of the LED bulbs. Does that resolve the spotlighting, while still allowing the marquee to glow? If so, keep it that way or consider spray painting the tips of the LED bulbs. These are just two of multiple solutions.
Scott C.