I found a pretty good Mapping tool for 2D games today, it looks great and can do what's needed, you'll have to code all overlays like effects in Lite-C/A7 but that's not the issue.
Yes it would, tile-studio is a great map editor, and with lite-c being able to add effects, entity's, which also can be ai's, npc's, even the player! Though how would collision coding work when I add it to lite-c? via load_level("mymap.tsd");