I had the same issue with the menu not going away, but I used the scroll wheel like you suggested and it worked!
I couldn't tell what the different terrain types and weapons did.
Actually, no matter how I placed my weapons I didn't ever see them fire at the monsters so I'm not sure if they work.
Eventually, I figured out how left mouse button place terrain and right mouse button picks up terrain.
I used this to pick up a bunch of lava, then I surrounded my crystal with lava and it totally thwarted the monsters! They would just spawn and sit in the center square and not move. I guess maybe just have them move around randomly if they can't find a proper path to the crystal?
There's definitely the kernel of something really fun here, I encourage you to keep at it and keep us posted on your progress!