Q: I press remote buttons, lights flash on ATV but nothing happens.  Any suggestions.

I'd recommend an iTunes restore Restore your Apple TV to the factory settings - Apple Support

You probably realize this already, but just in case you don't - the upper "trackpad" surface of the remote is a button too, and that's the one you click to select something. It's a regular press, like you would on a mouse -  not a tap like an iPhone. 

Yup, it took me a while to figure that out (not too long though!). And I had the same problem with the original scroll-wheel iPod - followed by an "Oh! it turns!" moment.

I'm under the impression that the OP has an ATV2 based upon the signature line...