FieryTempest got it.

It envelops all, and all is lost.
It "Envelops" you, and, if it gets all of you, you lose.

A light tap
Hitting it...

Will bring the world back from certain destruction.
... will make it go away, which means you don't die in the fight.

The crimson man did it, wielding his power of lightning.
Reno has red hair, and another attack of his is electro-rod

Magic, strong magic, or is it just technology? Hard to say, these days.
The electro-rod was probably technological attack rather than a magical one.

FieryTempest, it's your turn.