I was in a huge fight and I tried to target the bosses. I placed my mouse right on the guys head. The mouse (hand) didn't change into an arrows to attack. So I moved the mouse onto his body. This time it targeted something behind him. By time I had been able to actually target the correct boss I had wasted a good amount of time.

Is there any way this can be improved?

i get that problem alot i find it best to place the cursor over or near where that red circle would be but i still do tend to end up targeting the wrong thing on occasion

That's when it's handy to use stomp to sort out the baddies for long enough for you to get the right target.

If we had a hotkey that was able to "select next monster" that would help.

I think I've occasionally come across this problem in my fights, especially with Agrock, but generally it doesn't matter since you should be removing the fodder first before heading to the bosses. A single, slightly above average damage source that takes four times longer to kill (champs and heroes, not end of dungeon guys) should be of lower priority than the mass of far-faster-to-kill-but still-pounding-on-you-rather-hard fodder. Even the end of dungeon bosses should wait until after you've cleared the fodder just so you can predict damage and potion use far easier during your duel with them.

1) A key that allows you to cycle through and target mobs would be great. In CoX, that's the Tab key.

2) Target the feet for the best results.

Do you have damage turned on? Because I do, and when it's just fodder, 90% of the stuff above my head says 'miss.' Some lesser creatures, like devastators, do a lot of damage, but most fodder does almost nothing. I'll sometimes pick up loot with a spawn still attacking me, because I don't even notice that there's still one left.

I use the "Page Up" key when fighting large groups to give me an aerial view of the battlefield. It makes targetting much easier.

I do similar... scroll wheel up to change the angle. and Stomp helps seperate them too.

I'm using a fairly high AGI Fighter right now, so STR is significantly lower than what I used to have, like nearly half of what it was 5 levels ago. Oddly I don't notice the difference damage wise, in fact the added hit rate is really helping when I chase ranged casters, but since STR rules the defense stat for some reason, fodder hits me 60% of the time which means I worry more about the damage build up from a large group than I do about any single damage source.

A single fodder I barely care about, and I stop for loot all the time since I have 7k HP anyways, but high AGI needs a different strategy from high STR.