If two characters are on the same Y coordinate and one is visually blocking the other, what determines who gets drawn first? Is there any way to change it?
I think it's the baseline property and if it is yes you can change it Character.Baseline=numberofchoice(y coord);
Check the manual for more info on the baseline thing
I think it depends on the characters' IDs; although iirc that might change during the game (because characters aren't loaded all the time, just when they are in the current room, so their order in memory is going to change and then so is their drawing order. This might be complete BS though, it's just what I think I read some time ago).
If two characters have the same Y co-ordinate, the draw order is undefined. That means that AGS makes no promises about which one will be in front.
If you want to specify it, you can use the Baseline property.