Highlighting an area/rectangle on the floor

This can be easily achieved with a deferred decal actor. What you need are:

A simple translucent unlit deferred decal material:

A deferred decal actor:

295688-decalactor.png

Set your material to the decal then you have a piece of highlighted floor, and you can scale it to any size:

Docs on deferred decal: Decal Actor User Guide | Unreal Engine Documentation