Stereo Mix not recording

You may find that this is a machine with the recording funtion from 'stereo mix' (which is essentially the same as 'what you hear') has been disabled by the manufacturer, in response to the RIAA years ago saying that it was illegal to provide this functionality. They claimed that it enabled people to record copyright music being played without paying any royalties for it, which you would have done if you had bought a physical copy.

It was never illegal, of course - there are plenty of legitimate reasons for why people might want to do this. But the RIAA spooked a lot of computer manufacturers into disabling it.

There are easier ways of recording a live stream - the one I use is SoundTap, which gets around all of the connectivity issues, and is dead easy to set up and record from. Other apps are available, of course.