I finally hit upon a partial solution to how I wanted overlays and my game to work together, and while the actual overlay scripting is off the table due to way too many issues, I was able to recreate most of the effects with some creative engine tweaking in the tileset editor.
Not as good as actual overlays, but I can do most of what I wanted.
Still improving art everywhere in my game, and speaking of art, I made some tileset changes so it's possible to walk behind certain objects like trees and buildings on some maps. This was implemented partially to give the illusion of "3D" to the world, and will also be used to add hidden characters and secret passageways later on. Some maps are also being redrawn and additional NPCs are being added wherever the world feels the most barren.
Having a few issues with framerate: I now have animated smoking chimneys and other fancy effects, but it's caused some framerate skips, and while I managed to make it mostly minor at best, I'm doing my best to keep the framerate as steady as possible, and I may lock it at a certain value as a cap to maintain smooth frame rate if need be.