Final Method: Realtime Mask
This works in a similar way to the second method, but is much more complicated.
Start by making a new layer. Set the colour to black, make it not transparent, and set yes for Force Own Texture
Now import a new sprite to this layer. This sprite is created with a large soft white brush in your chosen image creation software. Set the blend mode of this sprite to Destination Out
Now, like before add an event for this sprite:
every tick -> set glowsprite position to character.x, character.y
Again, you can make the glowsprite into a torch beam, a star, or whatever takes your fancy. And by changing the colour and opacity of the level, you can change the darkness. However, you can't use a different colour for the glow, it has to be white. You have to import another Sprite to be your colour.
Of course, with this method you can import more white glows to be additional lights, which is a cool addition.
Silent Hill in the 70s?