Along the lines of the "ce que" versus "quel" question...

Bonjour Joyance !

First of all, Ce qui fait peur ici ? is not correct, because as you need to have the element referred to by ce qui / ce que (what, which) mentioned in the same sentence.

Therefore, to ask "What/Who is scary here?", you will use the interrogative pronoun Que or Qui, as such:
Qu'est-ce qui fait peur ici ?  (for undetermined)
Qui fait peur ici ?    (for a person)

To which you could answer:
Ce qui fait peur ici, c'est qu'il fait noir.    (What is scary here is that it's dark.)

As for Quel?, it is used in questions where a specific choice is presented: it means "what" in the sense of "which (one)?" here.
E.g. Quelle chose fait peur ?  (What thing is scary?)
       Lequel fait peur ?   (Which one is scary?)

I hope that's helpful.