I think it looks pretty nice!
(using Blender 4.2) I put my flame in “Volume” instead of “Surface” in the material output otherwise I could not get the light to shine outside the object, even with a light radius larger than the object 
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Nice scene, well done!
I had the same issue. My “solution” was to not use any lights at all but work with emission only. That limits me to Cycles, as EEVEE does not render emitting light from objects the way Cycles does. But since I’m a Cycles fan and rarely ever use EEVEE, that is no issue for me.
You can have a look at my version here 
Low-poly dungeon finished
Another option that should work is keeping the “flame” as a separate object and make it cast no shadows at all. Doing this for the whole torch does not work, at least for me, as the torch itself casts a nice and IMHO important shadow downwards, as seen very nicely in your version. But if I had to work with lights, I’d try that route.
EDIT: Fixed link ^^
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You can instruct the flame object to pass the light placed inside this object.
A face has two sides. On the front is where the normal resides. The back is by default not seen, not rendered. But Blender does shows them (the backside) in the editor. ortherwise it would be difficult to model.
The reason for this is that what you can’t see (the back side, inner faces), you don’t need to calculate in the renders. It is the first step of render engines to lower the amount of calculation.
The best way is to add an emission shader, which you could animate too besides an animated mesh.
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There are advanced techniques for producing flame like objects which you can animate. I don’t remember anything about them but it sounds like you are doing similar things. I thought you would get a better result though. So I don’t know what’s wrong.
Cheers
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