There should be a keyboard displayed in your bottom screen along with a few options like screen scaling and three options for mouse emulation. When MiniVmac starts the mouse is mapped to a scaled position in relation to where you are touching the touch screen, however this happens right over the keyboard. Pressing start brings up the D-pad control of the mouse and as you mentioned X is a mouse-click.
What device are you running this on?
I'm curious as to why you can't see the keyboard or if the touchscreen doesn't work for the scaled mouse.