[...] so I was thinking about putting a sensor custom icon and assign an action to the sensor to operate the servo. Is this the way to go or am I overcomplicating?
That's the way I'd go¡ In the Sensor table create an internal sensor then in the layout editor choose the "Sensor Icon" (round) radio button and then the internal sensor in the combobox dropdown menu... then shift-click on the layout view next to the crossing where you want the icon.
If you're doing signals all this could be tied together (both physically on (under? ;-) your layout and virtually in JMRI).
George Warner