One option is to drop the lights into the room itself. You'd see this with track lighting, close-to-ceiling fixtures (i.e., flush mount fixtures), chandeliers, or even just a bare bulb sticking out of the ceiling.
These options definitely don't make sense in a soffit outdoors. And even indoors, you may prefer recessed lighting. Luckily, there is an option, which is to use a thin recessed light designed for this purpose.
A traditional term for this is a "shallow can," but this suggests still needing space for a can, which is what you got with older lighting technologies. These cans were typically around 3 to 5 inches deep. But today, with LED technology, you can get truly thin fixtures that are less than 1" in height, and need less than 2" above the ceiling for installation.
We carry the Lotus line of ultra thin recessed lights to give you this recessed lighting option.