tab function works differently

I just swapped my wireless keyboard to the touch ID one and whilst my iMac is too old to use that function, I wanted it for the numeric keyboard part. Anyway, now when I use the tab function, instead of going to the next box it does all sorts of weird things like goes back to the start or does nothing (??) and also now creates a blue outline around certain things when it never used to.

Also I used to be about to use the space bar to pause music/video but now it doesn't. How can I fix this so it goes back to what I was used to? Thank you.