I don't have an answer for you, but I can report that I am experiencing exactly the same issue over the past couple of days with my 43UH750V, so rest assured it is not something with your setup. Presumably it must be something to do with software/firmware update going awry.
I too have tried everything include a full factory reset and this has not helped. I've logged a call with UK LG support and will let you know if I get anything useful back from them.
I've got an LG 49UH850T running webOS 3.0 and software v 04.30.06. For the past few days, the pointer of my magic mouse does not seem to be working within the Netflix app. I have to use the directional keys of the remote to navigate through the menus and the titles.
Of course, the pointer works flawlessly in all other apps and the TV menus. I'm guessing this is software related.
Anyone else facing the same issue? Any workarounds/ fixes? I've tried resetting the app an re-installing the app.
Thanks for sharing!