Next button stays greyed in question and whole screen becomes active

Which version do you use, please? If it is CP9, there is no Next button on the question slides anymore, it is now a Skip button. In versions before CP9, the 'Next' button had a double functionality: during Quiz it was a Skip button, but during Review it was needed as a real Next button. CP9 fixed that eternal confusion (see my article Question Question Slides in Captivate - Captivate blog ) by introducing dedicated buttons that will only appear during Review. Skip button in a question slide means that the user is skipping the question, no failure, no success message and of course no score.

If you want to use the default MCQ questions, you need to know its design. Submit process is in two steps (see also the blog post):

1. User clicks on Submit, the question slides remains paused, feedback messages appear which also explain the second step
2. User clicks on the slide ( the whole slide acts indeed as a click box) or presses Y (not functional always in responsive projects); playhead is released and the actions which you specify On Success or Last Attempt are done. Only on Failure if there are more attempts left on Question level, a Retry message appears and the playhead is not released.

What you want is tweaking that design, but you have to be careful. The mentioned article explains how you can tweak that two-step process. If you really want a Next button (risking the confusion between Submit and Next which existed always), you can find a tweak scenario there as well.