I have a managed action with returns bool when a button is pressed.
Depending on if true / false is returned I want to be able to change the properties of controls on the dialog. Not limited to just the text value.
Is this possible, for example the visibility, etc?
It is possible, however you will have to make sure there is a set-property control event (after your managed code custom action do-event) that touches a property related to anything you want the UI to update. If you change a property value within the managed code, or via the wrapper InstallShield provides, the Windows Installer UI doesn't track the change and update in response.
So, for example, you could wire your return value to the property RETURNVALUE, and then add a control event that sets better named properties like MYCONTROLTEXT or SHOWMYCONTROL; the control or its conditions would be wired to those better named properties.