So I learned in another forum from multiple people experiencing the same symptoms and how they resolved it that this is mostly likely corrosion in the IHKR module located behind the panel there where the buttons are and probably some corrosion on that module. Which makes sense also because I live in a high-humidity environment. There's also a youtube video about how to pull the panel and locate the IHKR module to fix it. I can't post the link to the video cause it won't let me because I'm a new member. Anyway, the video scared me with all the wires and what-not and pulling a panel that doesn't want to be pulled and lots of scary wires. But I do know a BMW AC guy whom I trust and it sounds like I can get a new IKHR for about $40 so I am hoping to get this resolved for less than $100 and I can live with that. I will report back with the results.
By the way, I was able to just disable the buttons from flashing and the AC coming on intermittently by pulling the #27 fuse in the fusebox in the engine compartment, so that stopped the lights from blinking and the thing coming on and off while I get it resolved.