Therefore, the game seems to be okay. Let us be frank, I don't know now what can be wrong. I've never seen problems you are experiencing.Perhaps the mouse driver? All problems seem to originate at the mouse: character creation is done by it, you can attack by a mouse but you should attack and not cast a spell. Can you pick an item from the ground by the mouse? Does the other mouse functions work correctly? Selecting dialogue options? Shops? Inventory? Are you playing unter winblows NT of some sort (winblows 2000, XP)?
At any rate, you can play using the keyboard interface and use the mouse only for picking items, managing inventories, and selecting dialogue options. You can configure the keyboard so that the playing will be fine.
