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I've been trying to set up some simple lights in the mod tool, but I can't control the light falloff/attenuation for anything. Every light I make seems to be infinite, even if it's an area light or a point light. Am I doing something incorrectly, or are these features broken in the mod tool?

The settings that I have been messing with are in the light attenuation settings in the light's options.

Do you have the scene headlight turned on?

You might also want to delete the default scene infinite light that is automatically created.

I actually figured out that in the viewport any light you make appears to be infinite. But if you render a frame, all of your attenuation settings work just fine. I've been making so many dumb mistakes lately its not even funny!

Well you can have active lights in the viewports, you just need to make sure that the settings for that viewport are correct, might wanna experiment some with the render tree and realtime shaders. Also, like before make sure that the headlight option is turned off under the display settings for that viewport, you of course don't want to use textured decal if you're wanting to view realtime lighting and shaders.

Although I can't imagine what you'd be using it for making content for a game, the best options to view your models to see the closest result as they would appear in game without any specular effects would be with the headlight on and using the textured decal view. I've seen a lot of peoples models come out too bright in game because they were using lights in Softimage with the textured view setting causing them to paint everything too bright because the viewport had everything looking dark.

The lighting is for a different purpose entirely. It has nothing to do with texturing or viewing my models.