This project has been fixed thanks to @dimitrip's help. YAY! Type letters to make them appear on the screen. Left arrow to delete. Not very impressive, I know, but I just made this as a coding test so I can use this system for other projects.
@dimitrip suggested to move a script from the "char" sprite to the stage, which fixed the problem I was having. All other coding is by me. 9/5/2015 - Fixed a bug where typing letters too quickly would cause them to appear over top of each other. Feel free to take a look at my coding if you want to use this system for any of your projects.