@Paul > Congrats on the purchase, sorry to hear you're having problems out of the gate!
First, the USB button will always flash - that's to indicate which USB input is assigned control. If you look at any performance video online you'll see them flashing.
If you've installed the drivers and the utility software, you can verify the configuration there. If your recording quality is poor, it may be due to the levels you have set for recording either within the software (Serato?) or the levels on the hardware may be too hot (in the red)?