I have seen this when attempting to use the "SVGA" X Server with an older S3 Virge and TSeng cards....... It would seem these cards do not work at all well with the Linux X server, However I did find that the S3 Trio worked well & gave a normal screen....... Hope this helps

Corel Linux is, for one thing a little bit old, if you don't feel like
editing some text files to fix this (and it might not work anyway), I'd
suggest a newer distribution.

That said, you can probably change a Software cursor variable in your
XF86Config file. It's probably just a bug in your video card, or the
xfree driver for it. There should be a XF86Config manpage for more
information on that (man XF86Config)

you're supposed to get a box, you only get an arrow in a window manager,
like gnome or kde. the console is a text oriented thing, a mouse is not
very useful <opinion>, if you've used a mouse in dos you get the exact
same thing. you could shut down the mouse server or take it out of the
startup scripts but i'm sure the mouse is useful for something, so keep
it in there till you find out. if you begin to use X you might find
that the console mouse server conflicts with it and the window managers
on it, i haven't had any conflicts myself, but you might.
it's a classic style choice, the whole letter is selected instead of
having a line in front of the letter, apple2, pet, dos, atari, they use
the box style cursor. it's not always true, but most of what i've seen
is that text based os's use the box.
Xfree86 is one of the standards of linux, if you are more
comfortable with a graphical interface you might have an easier time
with it, but getting it running with no errors first time is near
impossible, not a big problem if you only do it once and don't change
your hardware.