Thank you so much for your detailed feedback and suggestion!
You're absolutely right about the hand clogging problem. Our main concern with deleting cards was that how does the player to go back to a dialogue response, if they forget something they've already seen? This would require a different mechanic since the card would be removed after dropping. This issue, as you also mentioned, is mainly due to the "free-hand highlighting" mechanic.
Your suggestion is spot on and something we also discussed. Honestly, the highlighting was what we wanted to test in the jam since it's a high risk high reward kind of thing. It makes the game novel and intriguing but it's unintuitive, has accessibility issues, and causes design problems like the ones you mentioned. Ultimately, its existence depends whether we can get it there or not.