There's nothing particularly of note in that log unfortunately. I run xsqueeze on an atom machine without issues though (although I never use a mouse with it).
I am going to guess the issue is related to the pause I put to reduce the whole game input loop impact of the whole thing - this makes it usable on Pi, and isn't really an issue for keyboard/remote responsiveness in practise - but I would guess a mouse requires a fast continuous event response.
You could test this by changing one lone of code in script.xsqueeze\resources\lib\classes\NowPlayingWindow.py
line 267:
xbmc.sleep(500)
add a comment symbol:
#xbmc.sleep(500)
...to take this out (make sure you keep the indent identical!)
If that makes your mouse responsive again (and doesn't have other negative consequences on your platform - leave it running for a solid hour or so and try it then again), then I can add this as a configurable setting to solve both issues....
(one thing I do note is it'shaving toriuble retrieving your cover art -
18:14:36 T:2833238848 ERROR: CCurlFile::Stat - Failed: Timeout was reached(28) for
http://192.168.0.6:9000/music/6552/cover.jpg
18:14:36 T:2833238848 DEBUG: GetImageHash - unable to stat url
http://192.168.0.6:9000/music/6552/cover.jpg
18:14:36 T:2887650112 ERROR: CCurlFile::Stat - Failed: Timeout was reached(28) for
http://192.168.0.6:9000/music/6553/cover.jpg
18:14:36 T:2887650112 DEBUG: GetImageHash - unable to stat url
http://192.168.0.6:9000/music/6553/cover.jpg
18:14:36 T:2850024256 ERROR: CCurlFile::Stat - Failed: Timeout was reached(28) for
http://192.168.0.6:9000/music/6554/cover.jpg
18:14:36 T:2850024256 DEBUG: GetImageHash - unable to stat url
http://192.168.0.6:9000/music/6554/cover.jpg
18:14:36 T:2729429824 ERROR: CCurlFile::Stat - Failed: Timeout was reached(28) for
http://192.168.0.6:9000/music/6555/cover.jpg
18:14:36 T:2729429824 DEBUG: GetImageHash - unable to stat url
http://192.168.0.6:9000/music/6555/cover.jpg
....but this might be because the album doesn't have any or something?