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 ^^