... play Daggerfall where you can't see the cursor and attack by simply clicking and use the mouse to look up and down? Mine is playing like Arena where you can see the cursor.

Mouse look or something. It's in the options menu under "Mouse"

Where do I find the options?

Go to main menu (Esc button), Click Controls, then Mouse, then click the View option in the mouse control.

Good idea to know the "Activate Cursor" button so one can toggle the cursor to click on switches and levers.

Lol, I found it already. I had to go to controls.