Need Help with FF3 Level Editor

What you want to do is click on view at the top left, right next to edit, and then check/click on "Physical Map" That will show you what tiles can be walked over, or will block your character from moving etc.
Yellow = Can't move or pass through the tile.
Red = you CAN move through them.
Half red & half yellow lets you walk halfway through a tile.
And of coarse no color at all means you can walk over and through it, like a red tile. This should show you why you are having the problem. Notice only level 1 has these colors, that's because level 1 is the only level with physical tiles. Level 2 & 3 tiles are all transparent.