Well the term lights out can mean a few things. 1. It's lights out in 5 minutes. (time to sleep in 5 mins) 2. John was in a fight and was hit so hard it was lights put for him. (John was knocked out)

This looks like a turn of phrase made up by the writer - it's not a common expression at all. We'd need a full sentence to give you a proper answer, but my impression is that "lights-out better" might mean that something/someone would look better in the dark. That is to say, he/she/it is ugly. Does that fit the context?