I'm thinking about using only 8 bits because I wanted to start of start with one or two input and one output. If that works I can proced to 16 bits or more.
are you planning to have the PC connected permanently?

if you look at a ladder diagram, you see outputs that are engergized IF an input or an output (relay simulation) is on or off; how will you handle that in one byte? What about timers? What about switches in series/parallel

What is Control blocks?
example:
byte 1: action type
byte 2: for action type x pin to test, for action type y: ... for action type z: ....
byte 3: for action type x where to go if pin is on
byte 4: for action type x where to go if pin is off
byte 5: ...
byte 6: ...
bytes 7 & 8: expansion (you will find you missed something in your initial design)

Erik

PS do not let the uC pins out of the box, at least BUFFER THEM, optoisolation is better, other means are even better