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?
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.