May I suggest how to do this on a canvas?
You can draw fat colored lines on the canvas for your found words.
You would have to redraw the letters over that line afterwards,
if you can't get semi-transparent colors working for you.
For end points, draw a circle to round the end off, before
redrawing the end letters.
For highlighting the current word, I suggest one or two Ball sprites,
to highlight the beginning letter and the end of the word being
offered by the player. The word can be highlighted further by
running the second ball over the length of the word, in the style
of airport runway lights, under control of a clock, with the user dragging the second ball
to the desired end point. A double tap or a button could be used to say
"I found a word", or the game could continually check if the player got lucky.
So the user would tap the first letter of a word to drop a ball onto it,
and drag from it to the word end, where he would tap again.
If the highlighted word is in your dictionary, draw the fat line.
You might help the user by snapping the indicator ball(s) to letter centers,
so they don't look sloppy.
To keep your code simpler, I suggest hiding the canvas pixel calculations
from the letter row and column calculations through layers of value procedures.
ABG