At my wits end

[Arokhs Twin]

That's great

[UCyborg]

I suspected the OP might have ended up with unpatched version of the game.

Mouse cursor always behaves somewhat differently if it's captured by the game, so it could be the reason.

Compatibility modes are practically useless in this case. They're there to address issues with applications relying on specific differences in Win32 APIs. And even then it's best to use Compatibility Administrator (part of Windows ADK) to setup a program to use only specific compatibility shims. There are cases where compatibility mode actually breaks the program. Also not all quirks are handled by it, sometimes it's necessary to patch the problematic program.

Running the game as administrator would just grant it access to certain protected parts of the system, eg. the Program Files folder. Although this is usually handled by file virtualization, which redirects files to user's VirtualStore folder, some random locations are not. The default NTFS permissions grant only read access to Users group, so if you install the game outside Program Files and don't patch it, it won't be able to write in its own folder by default.

[Mechanist]

Compatibility modes are practically useless in this case. They're there to address issues with applications relying on specific differences in Win32 APIs. And even then it's best to use Compatibility Administrator (part of Windows ADK) to setup a program to use only specific compatibility shims. There are cases where compatibility mode actually breaks the program. Also not all quirks are handled by it, sometimes it's necessary to patch the problematic program.

Well, it didn't seem to have hurt anything in this case.
Also, on my Win7 computer I have used XP compatibility mode for Drakan with no issues, but also no beneficial effect, when I was trying to sort out my BSOD problems caused by CrossFire (although of course I didn't know the cause at that time!).

And yes, I can certainly recount many instances of various problematic old programs/games becoming even more broken when using compatibility mode; though in these cases that was on XP to begin with, and I was trying things such as 95/98 compatibility mode.

[UCyborg]

Most interesting compatibility fix IMO is EmulateHeap, part of compatibility modes for Windows 9x systems. It works magic for stuff with buggy memory management. I wonder if it does anything for Drakan in the long term, particularly for running the server.

There isn't much there for graphics and sound related issues though. For instance, it would be interesting if there was a workaround there for games that refuse to do 3D sound positioning if they don't detect support for hardware accelerated sound.

[RefinedBulbasir]

And I want to thank you again
I was meaning to post an update
Like I said I’m totally inept
One last question
Is the game disc irrelevant now? Did I just need the Gold Pack? Did I even need the disc?

[Mechanist]

Technically, you don't need the game disc anymore, as Drakan: Order of the Flame is now effectively abandonware.

And as you've already seen, UCyborg's repack is a very easy and convenient way to play Drakan, without having to worry about installing the game and then applying the patches.
Not to even mention all the extra content that comes with the repack.

However, the original game discs tend to be quite valuable nowadays, precisely because they're rare - a collector's item, if you will. Especially if you also have the original box and/or the game's manual to go with it.
In your case it also has sentimental value, so you might want to hold onto it anyway, if only for that reason alone.

[UCyborg]

However, the original game discs tend to be quite valuable nowadays, precisely because they're rare - a collector's item, if you will.

Indeed. I'd also make an image copy of the disc. I did it back in 2013, though I suspect it might have been too late, there are 2 or 3 glitches in the soundtrack, unless they were already there before and I didn't notice them, which is a good possibility.

Most interesting compatibility fix IMO is EmulateHeap, part of compatibility modes for Windows 9x systems. It works magic for stuff with buggy memory management. I wonder if it does anything for Drakan in the long term, particularly for running the server.

Though I suspect bugs in the game don't have reliance on Windows 9x heap manager quirks. There used to interesting crash bug occurring with the editor 3D view on Windows 2000 and newer due to premature unmapping of shared memory, which went unnoticed since the memory was still accessible on 9x systems. It would probably crash on NT 4.0 as well if it had DirectX 6.1 support.

Just usual hard to identify bugs I suppose.

[Mechanist]

make an image copy of the disc. I did it back in 2013, though I suspect it might have been too late, there are 2 or 3 glitches in the soundtrack, unless they were already there before

You can check that with some scandisk-like software, doing a sector-by-sector scan. I think that Nero Burning ROM has one such utility in its toolkit.

I also distinctly remember using some ancient program to rip scratched audio CDs - which treated all the sectors as data, and kept retrying (up to a specified limit) until it got a successful read.

Factory-pressed CDs tend to be extremely robust, as long as they aren't scratched too badly, and the aluminium reflective layer is not physically damaged.
I still have several such CDs over two decades old, and they all still read perfectly fine.