I want it to click to open within proximity and to spawn items the character can pick up.
Please leave a link i do not know what you mean
That is the simplest way, altough you have to create the new chest sprite every time as each of them will have unique spawn X and Y, and also probably different objects you will want it to spawn. Remember to create an chest open animation and to leave it on last frame once it’s done.
If you need to take a look here is my game: Bobby's world tour - Flowlab Game Creator
look for “test chest” object in edit mode, hope that helps!