After getting really frustrated I decided to re-install a virgin copy of OH2 and start again with a minimal config to debug my issues. However it isnt going to plan because I cannot get the basics working and not sure what to do.
When i click on the button, the state changes visually but the lights do not turn off or on
Since you are dealing with MQTT the problem is either your mqtt.cfg which means OH is failing to connect to the MQTT broker. You should see an error when OH first starts in openhab.log if this is the case.