PWM may be possible after the sensor but perhaps overkill. The sensor housing probably has at least a reverse blocking diode and maybe a complete rectifier. You could knock the LED current down with a resistor (1-5Ω 1W or 10Ω 2W) or just add a few power diodes in series (1N4001-7 or similar).
That may be, but the same solution can be applied in any case, just make it bilaterally symetrical for both wires. It depends on what level of control you're hoping to achieve. If you want a fixed attenuation, just install it at the source. If you want to be able to vary the brightness from time to time, you need to add an intermediate box of parts (PWM circuit, diode attenuator or resistor attenuator) with switches or knobs. There's a good chance that your LEDs will dim significantly on their own with use anyway. Solid-State Lighting: Lumen Depreciation