I'm sorry, I was a little unclear - shouldn't have gone off-topic with my second bug!

Turning on Indirect Light should cause surrounding objects to be lit. The C3 manual, p. 554: "Without Global Illumination, the glow will only make the object brighter, but if you enable the Indirect Lighting option, a glowing object will act as a light source."

I did not turn off Indirect lighting. I removed an object (the upright) that the light could bounce off. The result was no illumination on the floor plane (bug #2). With the upright present, illumination shows up with the severe rectangular artifacts in my image (bug #1).

If you look at 3ddave44's problem image, the artifacts extend outside of the shadow region, which made me think this is the same as my bug #1 instead of a soft shadow problem.

BTW, changing Lighting Quality seemed to reduce but never eliminate bug #1.