Is the draw distance in this game tied to light, and does it increase when the light level does? Because I'm thinking of getting this game but I don't like the way it looks like you can only see a meter in front of you at any time.
Yes, it is. With daylight spell it looks like this (see attached screenshot). But don't expect wonders, it quite old game.
I highly recommend it, it is masterpiece.
There is many different kinds of light sources in game, which will give different light radius. Candle, torch, oil lantern and many spells at least