However it does not stay on top of the scene because new objects are created during the application run, and the cursor goes behind them as it is an older object. I want the cursor to stay on top at all times... How can I do this?
That does make the cursor go on top, but unfortunately it makes the program no longer react when I click on objects.
I've read somewhere that the image of a custom cursor can get in the way, but that mouseEnabled = false; is supposed to fix that. But it doesn't. I'm not sure what the problem is.
maybe you should be doing
cursor.mouseEnabled = false;
If cursor is inside another movie clip, make it so its highest-level parent is mouse disabled too. The graphical-moving thing is more of a workaround than a true solution, but It should work too.