I had problems runnin sakura on itouch as it still kept loading itouch firmware but this seams to work just Put everything in the "iTouch - M3 Sakura Dual Boot v2.1" folder on to the root of your card!
Backlight can be one giant light panel with a diffusor, but recently there's mini/micro LED backlighting, where you can control the light level for smaller areas of the screen, to get better contrast and color range.