Every time I pick up one of my characters and set them down somewhere else there is the little yellow glow on the ground where they left and where they landed.
I first noticed it when I took someone out of the washroom by accident, so I thought it might have been a little pee lol but it started happening with all of my characters.
I had to start over after the characters died, and my new character has the same glowing yellow spots.
So the next thing I did was uninstalling the game from my iPhone and reinstalled it. I'm still having the same problem!
Does anyone know why this is happening and/ or what it is?

No need to uninstall/reinstall. The little yellow spots are meant to be there. Think of them as dust moving or footprints of the family members. They remain for only a moment or so, once you pick them up or set them down. Actually, this interaction with the ground when you pick up or place your peeps is in each of the virtual games.