Let's take this module:
http://www.futurlec.com/LED/LEDMS88O.shtml

If I put one LED behind each character (and the total display has 10x11 characters), then I will need 4 modules (total cost) $1.90*4 = $7.60.

Each LED is 3x3mm. CC distance is 4mm.

The total area for the text would then be 10*4mm x 11*4mm = 40mm x 44mm. A nice small display. Nothing fancy for the wall, but a perfectly capable solution for a school project - the complexity of the task isn't much affected by the physical size of the resulting clock.

Anyone who feels that this is too small, can upgrade. Design with 2x2 LED behind each character. The CC distance for the characters will then be 8mm. The total area for the characters will be 80x88mm and the cost will be $30.40. Splitting a series resistor to both anode and cathode side, you could cheat and drive two rows at the same time, since the two rows are expected to display the same information.

Using this matrix
http://www.futurlec.com/LED/LEDMS57R.shtml
with 2x2 LED/character, you would need 15 modules (X: 5*5 = 25 diodes - 22 needed) (Y: 3*7 = 21 diodes - 20 needed) total $25.50. That would give a character CC of 10x10mm and a total character area of 110x100 mm. Using 3x3 LED/character with this module would require (X: 7*5=35 diodes - 33 needed) (Y: 5*7=35 diodes - 30 needed) 35 modules => $52.50. 15mm CC for the characters and 150x165 mm text area.

As you can see, a LED matrix behind the clock works quite well as long as the display is reasonably small. And if you make the clock large, then the amount of light behind each character will be much higher which may make it hard to get your suggestion of 3 LED to produce enough light in case the sun shines on the wall where the clock is hanging.