We study the spectral function and quasiparticle scattering in Li-decorated graphene (Li@graphene) with an atomistic T-matrix formalism and uncover adatom-induced spectral effects which shed light on experimentally observed angle-resolved photoemission spectroscopy (ARPES) features. From transport studies, alkali adatoms are known to introduce charged-impurity scattering limiting the carrier mobility. Here, we demonstrate that Li adatoms furthermore give rise to a low-energy impurity band centered at the Γ point which originates from the hybridization between the atomic 2s state of the Li adatoms and graphene "surface" states. We show that the impurity band is strongly dependent on the concentration cLi of Li adatoms, and aligns with the Li-induced Fermi level on the Dirac cone at cLi∼8% (EF≈1.1 eV). Finally, we show that adatom-induced quasiparticle scattering increases dramatically at energies above ∼1eV close to the van Hove singularity in the graphene density of states, giving rise to a large linewidth broadening on the Dirac cone with a concomitant downshift and a characteristic kink in the conduction band. Our findings are highly relevant for future studies of ARPES, transport, and superconductivity in adatom-doped graphene.