How to highlight all instances of variables that are clicked on?

Have you try this =>

File -> Settings -> Editor -> General -> Highlight on Caret Movement

Then for my personal use, I checked the three options :

-Highlight matched brace -Highlight current scope -Highlight usages os element at caret

enter image description here

Have you tried Identifier under caret setting?

Probably some mismatch with the colors you have set for Foreground and Background

Check my screenshot and let me know how it goes