Light in "Araby" represents illusion, spirituality, other-worldliness, and transcendence (a certain removal) from the dismal present.
In writing about Dublin, James Joyce rarely omits depictions of the influence of the Roman Catholic Church on its residents. He also describes their Irish proclivity for giving certain elements of the Church's beliefs the quality of myth. Thus, light in "Araby" carries with its symbolism something of the religious: an aureole surrounds Mangan's sister as she stands in the doorway like a vision of a saint; the youth lies in a religious supplicant's prostration on the floor in both carnal and saintly worship for the girl as he fantasizes about her.
This illusory light of holiness is like the myth of the "holy grail" that the knight seeks; for instance, when the youth accompanies his mother to the grocer's on Saturdays, he senses both religious feeling and carnal desire:
...that I bore my chalice safely through a throng of foes....My eyes were often full of tears...and at times a flood from my heart seemed to pour itself out into my bosom.....But my body was like a harp and her words and gestures were like fingers running upon the wires.
So infatuated with this girl is the youth that he loses interest in all else. Still, he does look forward to seeing the bazaar to which he invited Mangan's sister, even though she cannot come. He makes a promise that he will purchase something for her. Unfortunately, his uncle returns home late, and when the youth is finally handed some money, his dark journey to Araby marks the end of the illuminated fantasy of childhood.
When he arrives, "the upper part of the hall was now completely dark." At this point reality crushes his illusions and the youth has the epiphany that he has been deceived by his romantic absorption in his own feelings:
Gazing up into the darkness I saw myself as a creature driven and derided by vanity; and my eyes burned with anguish and anger.
Ironically, then, the youth has clearer vision in the darkness than when light shrouds his images.
Light represents hope and pleasantness.
Joyce's Araby is certainly one of the best short stories ever written and as you have probably noted, the reference to light here is quite interesting. With reference to his other works, Joyce was quite interested in symbols and in Araby light has been used by him almost as adeptly as an expressionist because it certainly helps externalize the psychic workings of the narrator.
Probably, from even before the beginning of the story the narrator fancies Mangan's sister and his inability to acquaint with her, it might be said, makes him perceive everything as dark(say "dark muddy lanes", "dark dripping gardens", and "dark odorous stables.") On having a conversation with the girl, he seems to see light as more available than before. "The light from the lamp opposite to our door" allowed the narrator to have a glimpse of the girl's neck, hair, and hand but as the concluding part of the story will tell us, this seeing in half-light is incomplete.
When he goes to Araby, the narrator finds that "the greater part of the hall was in darkness". Could we not call it a premonition? The ending of the story tells us that "the light was out." Indeed, it isn't merely the lights from electric bulbs he is talking about. His epiphany being complete, another light has gone off, and in closely reading the last line of the story we shall find that there is not as much light in the world as the boy had earlier thought.