Yes, unfortunately, highlighting errors can make them stand out too conspicuously . Although it depends on the style you have chosen in your Moodle theme for highlighting hyperlinks. Actually, our actual style is much less conspicuous than the one I used in my message. It looks more like this.
As for students simply not clicking on those erroneous words to go & check the correct form in the "grammar glossary", it is another problem. Hopefully, thanks to the new Glossary entry tracking enabled in version 1.5 it will be possible for the teacher to track those clicks & act accordingly.
> But it is all very time consuming...
Is this some sort of understatement?

See you soon in Paris,

Joseph_R