Reducing lag in a script help?

Firstly, you should learn how to tab it correctly. It will greatly help your scripting. An example would be this:

while true do
    c = script.Parent.LightUp:GetChildren()
    if script.Parent.ON.Value == true then  
        for i = 1, #c do
            if math.random() > 0.5 then
                c[i].BillboardGui.ImageLabel.Visible = true
                else
                c[i].BillboardGui.ImageLabel.Visible = false
            end
        end
    elseif script.Parent.ON.Value == false then
        wait(.1) -- You also put the end for the entire branching of the if statement before wait causing line 11 and 12 to be utterly useless and causing an error.
    end
end

Next off is how to do this correctly. As of right now, "while true do" is basically a loop that will continue on forever. This is because the "while" loop checks if the condition is true or not. "While true" is a means of repeating the script over and over without it stopping, thus nothing will happen after it. This will NOT check boolean values. However, you can still use the "while" loop. Only with a bit of editing. Instead of checking if true is possible, you can check if the variable is true or not.

while script.Parent.ON.Value == true do

What this will do is check if the value of the boolean value that you have under your script parent. In order to compensate and correct this entire script, you would remove the if's and elseif's that deal with the on value. Thus delete lines 3, 11, 12, and 13. With this being the end result:

while script.Parent.ON.Value == true do
    c = script.Parent.LightUp:GetChildren()
    for i = 1, #c do
        if math.random() > 0.5 then
            c[i].BillboardGui.ImageLabel.Visible = true
        else
            c[i].BillboardGui.ImageLabel.Visible = false
        end
    end
end

Shame on you for skipping to the end if you did so, because this post will help your scripting knowledge as will as help you find your answer!