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What about lighting? It seems further away is darker but not sure how much we can modify the whole thing.

This template uses a very basic lighting system, but draw distance and fog is definitely part of this template. To change it you will have to adjust the code in the 3D camera and shader, to modify fog colour and distance.

As for more advanced lighting, it's definitely doable but you would first need to modify the 3D world generation code so you can add proper normal vectors to the vertices (not used in this template but doable for those with advanced knowledge in 3D in Game Maker).

DragoniteSpam is the YouTube channel for that as he covers plenty of topics like advanced 3D lighting.