I've been replaying this game and thinking more about it. I'm not sure whether to still use spoiler tags because the thread title says spoilers, so I'll kind of wing it.
I think the Dark Fall is an evil force that the ancients encountered and finally trapped under the earth near what eventually became Dowerton. It's stronger with proximity -- so the closer you are to the station, the more powerful it is. The evil seeks release and also tries to influence the living and the dead.
It affects the living by making them prone to hatred, and fear, and further on to suicide and murder. Perhaps it also calls the living toward occult practices and pulls them toward "suicidal" addictions -- drugs, alcohol, etc. (I think the room with the playing cards, syringes, bottles and magazines represents addictions.) The local people seem to have more than a common share of problems, according to the local newspaper.
The Darkfall affects the dead by calling them back to it after death, using their "regrets" and then trapping them.
Maybe the mannequins
represent Mr. Bones? They are in his hidey hole at the beginning of the game, and in the cafe where he prepares his meals. We see mannequins twice with their hands as though in handcuffs -- we know Mr. Bones was arrested. In the cafe, there's a brief glimpse of a ghost wearing handcuffs.
I think Bones killed Amy or allowed her to be killed in room 1A -- perhaps he let the shadowkin kill her, or perhaps the shadowkin possessed him and he killed her.
The mannequins around the hallways on the first floor are shutting something out -- two cover their eyes, the another his ears. The mannequin originally outside the storeroom near Platform 2 on the first floor appears to be in "handcuffed" position early in the game. Later in the game, he has moved and points to the storeroom, his head bowed in shame.
The wall just outside the storeroom has a drawing of the devil. In the storeroom, Amy has drawn a picture of the hotel and the only dark room in the picture is 1A. You can hear "silent night" playing as if on a music box as the camera zooms in on the dark window of 1A -- and in 1A itself, the same tune plays when you get close to the TV screen and hear the interrogation.
The mannequins in 2B -- two sit with heads bowed, the other is trying to get out. I think this is the only place that mannequins are actually in the rooms. There are scissors all over the bed, and blood. I think 2B is where The Inspector killed Mr. Bones, using scissors.
There are red crosses on the doors of all the first floor rooms, and red crosses on the four coffins (3 in the water tower, 1 in Mr. Bones' hidey hold at the beginning of the game). I think the red cross represents a murder.
The doors upstairs don't have red crosses on them, and there are many fewer symbols of the Darkfall. The second floor seems to be the suicide floor, while the first floor seems to be the murder floor.
EDIT -- thinking more about this -- I should have said room 2B is where the mannequins are sitting with heads bowed, and where the Inspector probably killed Mr. Bones. I've changed that above to correct the mistake.
I've also realized that 1E has a suicide (Gloria Grable) instead of a murder victim in it. So my theory of the first floor as the murder floor doesn't hold water.