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It all worked a couple days ago. I don't know what happened. I didn't install any updates or anything. Only did a few scans with cc cleaner and eset (I really don't think it removed relevant files).
What I tried was deleting the entire save folder with mods in the documents / runic games / torchlight... because yea, the files there may have been corrupted launcher files etc.
Other than that I tried reinstalling the game, ofc. Several times. Since it takes me 2 mins to download it.
Other than that i tried creating a shortcut and launching it as admin, didn't really work...
I suppose I could try installing it on ssd.
What fixed the problem, at least before it stops working again (for any reason) was going into the local installer files through steam and then changing the compatibility of torchlight2.exe. I clicked troubleshoot compatibility and then just tried the recommended settings. The message that popped up after that while trying to launch through the file exe was "fatal initiation failure", but the game seems to work fine from steam now.