the player camera is locked to character orientation. i'm more a fan of independent camera/player control myself (them being able to walk toward the camera). that being said you can hold shift to rotate the camera independently of the player. also toggling caps lock frees the camera entirely from the player. that lets you view your character from the front side or any angle.
as for the yellow light i can't say as i didn't have that experience. probably an issue with your graphics.