type tool square
there's a dotted square around the type tool symbol. that usually happens if an object is in the way. but there's no object in the way. and i can't delete any text with it. looks kind of like that drawing. and there's a tiny x where the cursor is pointing.

This is what the Type Tool ordinarily looks like.
This is what I get when the Type Tool is over a locked path with no stroke or fill applied, and with Smart Guides preferences set with Anchor/Path Labels turned off. So, as Monika says, check the Layers panel.