The first level was supposed to be an intro level. I've been trying to avoid explaining too much and creating walls of text, but I may have gone too far in the other direction!
For the sword issue, did you press U and then a direction? Or did you press U and then U again (this will cancel the move)? If the latter, did you get this tutorial message: "Activate your sword with [U], and then choose a direction, to kill someone one step away."? Perhaps that's a confusing way of doing it? (Otherwise it might be a bug; using your sword ends your turn, and then after that you'll be able to use it again, or move.)
As for the hiding, you can press Space to end your turn without doing anything. So while you're hidden, you can press space to have enemies walk past. I'm pretty sure I put that somewhere in a tutorial level, but maybe I forgot!
Thanks for playing and for the feedback!