At the main screen, I move the mouse pointer over the buttons ... but they wouldn't become highlighted/selected...

If I move the mouse pointer further down, the buttons at the top get highlighted...

I have tried updating the game, verify/repair and updating my GPU....but no luck...

Sounds like a resolution mismatch -- it's scaling your pointer movement to the screen resolution.

Since I'm running on Linux through Wine, I can't directly assist in troubleshooting, but the short of it is that you probably just need to match the game resolution to your monitor resolution.

Notes:
• You could try hitting Alt+Enter to switch into windowed mode if you can't manage the menus with the broken mouse offset.
• Alternately, you can set the resolution in the "options.txt" file in your user's "My Documents/My Games/" directory.