... световыми фигурами и композициями.

Grammatically and stylistically it is correct, but I wonder what "световые картины" ("light paintings") are. But sounds cool.

Alex, "украшен... световыми установками" is not ideal becausse "установка" means 'installation' in this sense: "2. Something installed, especially the whole of a system of machines, apparatus, and accessories, when set up and arranged for practical working, as in electric lighting, transmission of power, etc." . So 'световая установка" is a device somehow related to light, projecting light etc. Hardly this equipment is a part of _decoration_ itself.

Your sentence is correct! "Светящиеся картины" is correct too. I know what it means)

"Практически весь город украшен лампочками, гирляндами, световыми установками и" - is ok. "светящимися картинами" - what do you mean? It's sounds really anusual.