Is Pyxel mainly for level creation? Or is it also good for character and additional asset creation?
As said in the title, I'm just wondering what the use for Pyxel really is. I know its geared towards tilesets and level creation, but can it also be used for characters and various other pixel art?
It can actually work for both very nicely. You can set up multiple animations for a character, as well as make levels.
PyxelEdit is not geared towards anything in particular except being pixelart focused. The tile system has multiple purposes as it also acts as frames for animation, so character animation and the like are indeed also possible.
I use PE for make levels on my game, but I do it using the layers feature. Each level is assigned to a different layer, so I can export the data in .txt format and by using a own utility, read the data and convert it to my level format. This operation could be more easy if PE would export in .BIN format, not plain text.