How was Will sending messages through the lights?

As seen in the next season too, the presence of humans in upside down creates a flickering effect of lights in their surrounding space. Will would have noticed this and perhaps used this fact to control the lights; though I'm still unsure how was he able to do that rapidly during the time Joyce spells out his message.

Disclaimer: this answer is speculative.

It's possible that it is energy that ties the normal dimension to the Upside Down Dimension. After all, it is enormous energy from Eleven that opened it in the first place. Perhaps some form of dual interaction much like quantum entanglement - 'spooky action at a distance' - allows inhabitants of the Upside Down to manipulate some forms of energy in the normal dimension. What is somewhat confusing about this is the one-way nature of this interaction (that we have seen so far).