Hello DrageoN
First, I would recommend that you use separate event sheets for each layout. It makes it much easier to code and to read later. For example, you have multiple "On Start of Layout" events, but it is tough to know which layout you are talking about. As you develop your game, you can begin to use shared event sheets when there are function shared across multiple layouts.
I'm not 100% sure this is what you are referring to with 1.) above, but it seems once someone loses, their health goes to 0 and you destroy the player. When the player tries to come back in, the event which checks for the health is triggered and you are immediately brought out again.
Something else I would look at is you set the LevelNumber to 1 as a global variable and then add 1 to it on Start of Layout which would bring it to 2?