The character "moves a bit after you release the arrow" because movement in RPG Maker isn't pixel movement - you can only move between 32x32px (I forgot this was changed in MV) 48x48px blocks (unless specified otherwise, since RPG Maker MV the block size is configurable).
Also, mouse movement is only an addition to movement functionality introduced in RPG Maker MV because RPG Maker MV had to support touchscreen devices, all other RPG Maker versions used arrow movement.