I solved this problem by FULLY removing ELAN driver by going through every system file and deleting any trace of the program, I restarted program, it worked! I could finally move my mouse whenever I hold a key.
I tried putting palm tracking sensitivity to off and multi gesture monitoring off, still gets frozen whenever I type or hold a key. This is NOT hardware issue nor BIOS issue. Some people might find this freezing thing a good thing, but it's freaking annoying when I'm trying to cut/copy/paste with hotkeys and having to wait for the mouse to release. I have tried the latest driver and previous driver version via. Whenever I press any keys besides Ctrl/Alt keys, my mouse briefly freezes for one second. I got this laptop about 2 months ago, it has the latest BIOS version, etc. Got a hold of another guy from the premium tech support who was trying to help me through GoToAssist(sort of TeamView), decided to let him check it out, after a few minutes he was BRB, after few minutes of him AFK, I started feeling violated of him being able to control my computer, hung up and shut off the computer and system restored to make sure there's no trace of that problem at all. One rep sounded like he was stoned then his response to my problem was, 'Okay.*Hangs up*' Been trying to call back for hours trying to reach that same person so I can curse that little **** out.
I spoke with tech support from Dell, they're too ******* incompotent to help.