Spacebar begins conversation, and a mouse click progresses it. His glowing is actually just debug in the overworld, the num 0 to open a menu begins once you enter combat. I've updated the text on the game page to be more clear.
As for the resolution, in the games current state the visuals break when the game scales, this includes fullscreen mode. This will be changed by next demo day. The only UI Appears in the button remapping screen, and the testing arena, so the main portion of the game should be playable.
Thanks for the comments, man.