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It's something I've had some feedback about, you're supposed to select the key and use it on the thing you're interacting with like an old school point and click. Next time round I'll spend more time with helping the player learn the systems

I'm well versed with old school point and click adventure games. The problem is as far as I can tell there was absolutely no way for me to "select the key" after obtaining it.

Click on the inventory slot with the key in it :)

There was no inventory slot. I'm sorry, but I don't think you're understanding what I'm trying to say. There was NO way to use the key i.e. a bug of some sort.