How do you add opposing characters, such as a beast that will hurt you? Also, where/how do you add an attack function?

make "enemy" objects and then you got to add attributes and add in scripting too.

for example:

(hopefully, you can figure this out how to do this stuff in the GUI~Editor)

The "Object Type" (it creates an Inherited attribute) which you can select on~via the:

Object -> Attribute (Tab) -> Inherited Attributes -> (scroll down to the very bottom of the list to find the ones you created)

and the "Object Type" is added~created under the "Advanced" on the left pane~side (the "tree of stuff").

<object name="player">
  <inherited name="editor_object" />
  <inherited name="editor_player" />
  <inherited name="character_type" />
</object>

<object name="orc">
  <inherited name="editor_object" />
  <inherited name="character_type" />
  <verb name="fight">
    if (orc.hostile=true) {
      player.hp = player.hp - (player.str - orc.end)
      msg ("The monster attacks you, and now you have only" + player.hp + "life remaining.")
      orc.hp = orc.hp - (orc.str - player.end)
      msg ("You attack the monster, and now it only has" + player.hp + "life remaining.")
      if (player.hp=0) {
        msg ("The monster killed you")
        msg ("GAME OVER")
        finish
      }
      if (orc.hp=0) {
        player.exp = player.exp + orc.exp
        player.cash = player.cash + orc.cash
        orc.dead=true
        msg (You killed the monster!")
      } else {
        invoke (orc.fight)
      }
    } else {
      msg ("The orc is not hostile yet, so it's not an enemy that you can fight right now")
    }
  </verb>
</object>

<type name="character_type">
  <dead type="boolean">false</dead>
  <undead type="boolean">false</undead>
  <hostile type="boolean">false</hostile>
  <hostility type="int">0</hostility>
  <hp type="int">0</hp>
  <mp type="int">0</mp>
  <str type="int">0</str>
  <end type="int">0</end>
  <dex type="int">0</dex>
  <agi type="int">0</agi>
  <spd type="int">0</spd>
  <int type="int">0</int>
  <spi type="int">0</spi>
  <men type="int">0</men>
  <pie type="int">0</pie>
  <luk type="int">0</luk>
  <lvl type="int">0</lvl>
  <exp type="int">0</exp>
  <cash type="int">0</cash>
</type>

you can also make a command instead, which I can help you with, but not right now, going to see a movie, hehe.

------------------

here's some libraries ~ guides too:

http://quest5.net/wiki/Simple_Combat_System_(Advanced)
http://quest5.net/wiki/Using_Types

enjoy