Look at mouse is not working as planned

One trick you could use is via the LinePlaneIntersect node. I used something like this in a metroidvania type project before to aim:

For a topdown game, maybe use the location of Spine_02 or 3 as the plane origin(to aim at roughly center mass) and 0,0,1 as the plane normal. Or just add 100 or so to the Z from the world loc returned by convert mouse loc.