1.The creature lurks in the water, you need to listen using headphones. You'll then see it's red light. if you don't see it's red light you're safe.
2. there is no flashlight, everything is interactable on your tool belt. The event about turning off the light, there's a light bulb that is the only thing lit up you turn off.
3. Listening & paying attention to your surroundings is important.
Hope that clears it for ya! :)