Oh, you'll need to check the Physics box on pretty much all the objects you are placing that room I believe (I don't use the physics system much).
As I said, a -lot- of things are going to change when using physics, so you'll basically have to relearn everything you've learnt so far. You should not change positions of instances directly by using their x and y variables, you'll have to start using physics_apply_force or physics_apply_impulse to move things. You CAN change the position using phy_position_x and phy_position_y but this is NOT RECOMMENDED as it can create errors within the physics system (just like the real world, if you teleported something from one place to another by simply changing it's position magically, all sorts of bad things could happen).