IMO atmosphere is one of, if not the most important parts of a horror game. There's a lot of tiny elements that can help add to a game's atmosphere, but the two most important things are lighting and sound. Sound especially, a simple droning track can instantly make a place feel far more foreboding.
I recommend that you play through a horror game that you yourself find scary, and see how atmosphere is used. Think about what subtle things make it scarier while you play.
As for making monsters, I personally think that the best monsters make me say "what the hell is that thing." A monster that has an uncanny design, makes weird sounds, acts strangely, and just feels wrong or off is super effective to me.