Sorry, I can't help with mods but as far as the cursor I think that you've either selected (or deselected) hardware cursor. From the Main menu go to the Options menu, select the Video tab and either check or uncheck the "Hardware Mouse Cursor".
As far as surrenders that's only a selectable option in DA (and I assume TA). In DL you can't disable surrenders. This option was added because in DA it's actually more likely to happen and under less obvious circumstances than in DL.
However as you note an AI can certainly surrender in DL even with close to a dozen planets. One thing that causes this is if the AI has had all it's ships killed and has a zero military rating. Also, as far as I know, in DL an AI won't surrender unless they're at war with *someone*.
There are number of things you can do to avoid this. One is to keep track of the relationships between AI's and if you feel one AI is weak and likely to surrender you can usually pay whoever they're at war with a reasonable amount of money to make peace. Also if you play as "good" alignment you can build the Hall of Empathy that doubles the likelihood that an AI will surrender to you as opposed to someone else. However the best way is to essentially be in control of the situation by being the one that is in war with the AI's (one at a time assumedly) as opposed to having the AI's be in war with each other. In this case you want to be prepared to take an AI's last handful of planets all at the same time so that there's nothing left for them to surrender.