I know what is causing most of the bugs on this server setup, just not sure where to fix it. Hopefully you will keep this info between us. Let me know what you think!
The server is not receiving the x,y coordinates of the players from the client or vice versa. While in game you will notice that when you move from one location to another, no more mobs popup, this is because the server still thinks you are at your spawn point, even though on the client side, you are moving around. When you go to the most distant mob that you can see, you will notice that they disappear and reappear- this is because they are at the max distance from your spawn point and fading in and out of that boundry.
When you attack a mob you see it like this on the client end:
(YOU)-(THE MOB) you near the mob.
The server see's
(YOU)<-At your spawn point-------------------way over here>----------------------------------(THE MOB) The skill will not react.
I'll bet this is why skills don't work, other players in the game don't move (Although, if they jump, you can see this action from other clients) and why when moving to other areas of the map, you see no NPC's (Although they are really there, you just cant see them from your original spawn point).
If we can figure out why they server is not sending or receiving the X,Y coordinates, I think it would fix the major bugs, then we would just have (config) and (slk) bugs to work out.