Is this a backlight issue
Any idea on troubleshooting this issue?
Yes, it is a backlight issue and you properly troubleshot the problem.
Since the exterior monitor works, that tells you the computer itself and your graphics solution works. And the fact you can see a dim display when shining a flashlight in there tells you the notebook monitor is getting the video signal.
So you have conclusively determined it IS a backlight problem and that typically means either the inverter or the CCFL itself is bad. Typically both are replaced at the same time. This assumes this notebook uses the older technology inverter/CCFL backlighting and not the newer LED backlighting.
This is a fairly easy and common repair for an experienced...