Yes!! Setting the shadow depth works! Thank you! And yeah regarding the PBR packer, I watched your video on it but I'm confused.
My character for example is a large sprite sheet with over 200 frames. The sprite sheet is 1384 x 384px I dragged it into the clip window. I then clicked on normal but it's showing a 64x64 image. Same with material.
I'm honestly really new to normals and maps/etc. but basically I just want my players to not be so white when the lights are shining on them. Same with my buildings. When I have the le_day_night_cycle object in, once morning hits, the building and players are completely illuminated with pure whiteness. I just want my sprites to look like they originally do when light gets shined on them: I'm not sure what normals I'm supposed to be downloading. I tried using the online one you suggested in your video and created a normals sprite sheet from my player's sprite sheet and when I imported it into the game and set it as the normal map on my player object: the pure whiteness when the light shined on the players was still there.