Due to the nature of moving the trackball, you're bound to hit whatever is directly above it. Usually hitting the start buttons doesn't really do anything during gameplay, unless you have it set up that pressing them together will exit from the game. That can easily be remapped though. Why not make the mouse buttons work as standard action buttons? Through creative mapping in MAME, you can easily create a control panel that doesn't have lots of extra buttons.
As far as setting up the the button layout for MK, you could do the 7-button layout like this:
HP BK HK
LP BK LK
RN
It'd actually be closer to MK3's arcade layout that way.
I'm not sure why everyone is convinced you HAVE to angle the button layout. MK, the standard Capcom 6-button layout, and Neo-Geo cabs used a straight horizontal layout. For really long play-sessions, a slight angle might help a little bit, but by no means is it necessary.