I've seen that there are supposed to be red/yellow circles indicating AoE range in Pillars of Eternity, but when I hover to cast a spell, nothing appears.
Are there any graphical options that might cause this?


Yes, there is a tickbox in the game options menu where you can toggle this on and off.

Game options menu

An afterthought; but worth mentioning. As you move the difficulty slider, the checkboxes will update to match.

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