When Bruce was with his friend and her relative came calling from the other side, they perceived the smell of a skunk. This was how the spirit made herself known to his friend. When Bruce, being unable to accept the skunk smell, declared it impossible, he was cut off from it and could no longer perceive it.
The spirit did not create the complex chemical and fill the air in the house with it. She directly stimulated the brains of the sensitives present with the "concept" of skunk smell. Just as they create complex visual messages in the dream state or sounds in the waking state. This is bound to be much easier than actually creating the physical manifestations associated with each. This is why one person can sense them while another can not.
Very powerful spirits can apparently create physical events which will be seen by many people but the above accounts for why ghost hunters rarely turn much up on their physical cameras and instruments.
So, it is entirely possible that the toy was making no physical sound and there were no physical lights but you all perceived them because that was what you were intended to perceive.
The easiest way to reach a child is to use the association of a toy. The child is open to external influences because it has not yet learned how to concentrate; to block out external stimuli.
The child expects to be talking to another person while using the phone. That the toy is not hooked to a phone line and is just plastic means nothing to the child. A toy phone and a real one are identical from its point of view. This is exactly the technique taught by Moen for establishing and strengthening a connection to the otherside.
As far as the street lights going out as you approach, I would have to guess that it is due to your naturally sunny personality.

For Marilyn Maitreya: No apology required. I saw something silly you wrote as a comment in another thread and thought to question it but thought better and left it alone. You could not possibly have meant it the way it sounded. Rereading it I see you recognize that your view point of the time was wrong. Each experience changes our understanding of what we experienced in the past.