Ok, so I found out the following
Use the latest image that is already created on the lede site.
Not to add the dwc2 gadget options in the config.txt and command line.txt
and then to connect a keyboard! press enter where it halts and the login prompts appears Wasted soooo much time on that issue.
I got LUCI install but I could not get the tethering working, as I am wanting to use the Pi Zero W as a light weight VPN travel router. I followed the articles that I found but could never get it to tether.
decided to change path and got a solution working in an hour with the Pi Z W......
love the Lede project thou as I am using it else where.
Also got it to work now with slightly different method. I made a change to target/linux/brcm2708/base-files/etc/board.d/02_network script such that it always starts with eth0 enabled, and not wlan0. Then I built image with kernel modules for my usb to ethernet adaptor (uses ASIX AX88772 chip) . Accessed via ethernet using ssh and now everything is working very nice. RP cam also up and running.
Nice work! I might have another go this weekend based on what your work. I love the Pi Zero W, this is a very capable device I don't have a need for a eth port most of the time as I use mobile tethering.