GDI & Hardware Cursor

Answer 1

The cursor is simply the mouse pointer. Having a hardware cursor means that the graphics hardware can "overlay" a small moving image (often called a "sprite") on top of the regular graphics, by itself.

Implementing a software cursor means storing the background "below" the pointer, and re-writing that when the pointer moves. It can be tricky, especially when the underlying graphics is changing.

UPDATE: From a quick glance at the reference manual, you need to read up on the display processor (DP) module. The register DP_COC_SYNC seems to be concerned with setting up the cursor mode, while DP_CUR_POS_SYNC sets its position on-screen.