Mouse cursor disappear on video playback on ubuntu 16.10 on vlc.
As I hover my mouse pointer over the video playback, the mouse pointer disappears eventhough when i move around the mouse cursor.
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I had a very similar issue to yours, even the menus were being blocked by the video. Also, when I stretched my screen, the playing video stayed the same size and didn't stretch along.
If this sounds like the same situation you have, I was able to fix via this other SO answer (VLC not displaying video properly in FullScreen?)
@Huang Dongsung's answer:
In Tools > Preferences > Video > Output change to "OpenGL GLX video output(XCB), save and restart vlc.
If you use Intel GPU, following setting speeds up decoding. In Tools > Preferences > Input/Codecs > Hardware-accelerated decoding chant to "VA-API video decoder via X11"