Yeah what Arduino brings to the table is easily purchasable electronics and reference material/tutorials written for middle schoolers and not electrical engineers to understand. They invent basically nothing but make things more accessible.

The thing I would need to do the most googling on is the actual XY sensor. I don't know off the top of my head how available an optical mouse sensor is, or if you'd have to build a ball mouse, etc. I have occasionally played with USB HIDs but never for anything legitimate.