Catalina click-and-hold hijacked for useless crap?

I've been using Catalina on my new macbook pro for a couple of months now. It is incredibly frustrating when I try to use the cursor to do everyday things. For example, in the very text box that I'm composing this posting in, I'm trying to highlight the text "everyday things" at the end of the previous sentence so that I can do text-y things to it -- copy, cut, paste, etc. So I use my finger to move the cursor to the beginning of the 'e' in everyday, click-and-hold the bottom of the trackpad with my thumb, drag to the right on the trackpad with my index finger. I've been using a trackpad for decades, and this is all subconscious muscle memory. But it's broken in Catalina! When I use the trackpad this way, stuff gets changed to yellow and this stupid panel comes up and hides what's in the window underneath, and worse, steals focus so I can't do anything with the text I've highlighted without clicking off and losing the selection!

And this is every app ARRRRGGGGGHHHHHH!!!

What's probably related is that in Finder, if I try to click on a file to drag and drop it, it does the spacebar action of previewing the file rather than allowing me to "pick up" the file. I've discovered that if I hold the shift key down I can get it to do the drag rather than preview.

I don't even know what to call this! Can anybody tell me what I can turn off to get this basic computer functionality back? Or at least does somebody know what Apple is calling this misfeature so I can search and see if they've made any provision in the operating system to allow someone to use Catalina for basic everyday text manipulation?