there are no dots above the frame, background rendering seems to be grayed out when I select a movie clip and nothing gets rendered.
We can get more accurate information from screenshots than from written explanations.
If I use command-E to export an in-out section then the whole file gets rendered.
Because it specifies the whole thing. Look carefully at the diagram with ⌘E written in red. If you specify a partial range, the entire range will not be exported.
background rendering seems to be grayed out when I select a movie clip and nothing gets rendered.
Please select the movie and show me what is grayed out.