That's a pretty fun project. I wouldn't probably use Arduino for a low power embedded system, as that imposes pretty bad power drain at all times. If you program it directly in C you'll be able to just trigger on interrupts when the sensor hits and your CPU can be drawing effectively zero power 99% of the time. Also, you can avoid the usually horrible linear regulators and such that are in the system. The ATMega chip will run on unregulated power straight off the battery and you can use a 3.3v LDO regulator on the display to keep the power drain extremely low.

Pretty cool project in general, and I would probably have started with Arduino to get everything going, but I definitely would get rid of the Arduino part of it and code to the bare metal before deploying it for real.