That is very cool.

As for the problem of detecting the current position of hands - Casio solved in in watches with their Tough Movement mechanism, where there is a tiny tiny hole in the dial with a sensor behind it - the watch will check if the hands are over it when expected, and if not, automatically adjust - so even if a watch suffers a major impact that might move the hands, they will re-allign themselves. Such a clever and simple solution.