I can change screen brightness using Fn+Brightness Up/Down keys but I have to press Brightness Down button 60 times to go from brightness 100 to 40. Is there a way to get each keystroke to reduce/increase brightness by 5% instead of 1%? I'm using xmonad but I doubt that is relevant... seems like the kernel is handling this functionality.
It depends at what level your brightness buttons are controlled at. If you had to configure them yourself then of course you can change it. But it sound like your system has something like the thinkpad_acpi module my computer uses. If that is the case then I don't think that there is a way to do it easily.
I think the suggestion above is a good one, though it may not be possible to repurpose your backlight keys. I also tried a program called light at one point, and it gave me much finer grained control over the backlight, though it sound like you want a bit less control.