So after spending two hours figuring out how to install Daggerfall with the Dosbox emulater, I get it installed only to discover I can not swing my weapon. All the other controls seem to work fine, i've even tried to switch the keys but it doesn't work. Anyone with this same issue or know how to fix it?

It's not a bug, hold down the right mouse button and move the mouse.

Yes, you have to click and drag to swing the sword.

Movement glitches are usually caused by the CPU being too fast, like you can't walk up stairs. You should be able to adjust this in DOSbox, if needed.