I am making a game with limited mouse usage and a turn based battle system too. My game will only have one enemy per encounter, but I think I know a way to make a choice for different enemies. (Speaking of which, is there a better way of making random battles than putting an event on every map cell?!)
Anyway, I would make a picture for each name of each enemy. Then make a picture for the target selection. (Just a rectangle with -TARGET- at the top or something.) Make a global called gb_cursor positon or the like and set it to 1 when you enter the target selection mode. (Make a global for the battle mode too; 0 for the enemy's turn, 1 for command, 2 for enemy selection, etc.)
Make globals for enemy number one to however many enemies you want. Give each enemy an ID # so if you want Zombie (it can have ID#1 for now) and when you check which name to draw, if the ID is 1 you can draw your zombie lettering picture at the first enemy position.
If the battle mode is 2, when you push the down arrow it will add 1 to the cursor positon global, then call an event to draw the cursor depending on the cursor positon global. (-If cursor postion = 1, use stamp control to erase the cursor and redraw it at the top. Else, if cursor position = 2, erase and redraw the cursor at the coordinates where the second name is, etc.)
Do you get it? I probably don't make much sense, so if you want me to explain better or say more, just say so. I hope this helps.