To hide the cursor, edit /etc/lightdm/lightdm.conf: uncomment xserver-command=X and add -nocursor
I don't think we should completely hide the cursor by default. Maybe use unclutter-xfixes instead, which will at least show the cursor when you move it, and hide it only if it is inactive?
If you add uncoutter-xfixes to _pmb_recommends of postmarketos-ui-xfce4, users could also uninstall it without much hassle if they don't want it. (You'd still need to autostart it somehow though, e.g. like this)
I had a try with unclutter-xfixes and was not too happy. It doesn't feel like touch if the mouse pointer shows up on every action (especially when typing the virtual keyboard).
Disabling by default would be easy by installing an extra configuration file to /usr/share/lightdm/lightdm.conf.d. For most pmOS devices, this would be the better choice. However, for the few non-touch devices it would be annoying ‒ and probably especially for non-touch devices a rather convenional UI like Xfce4 would be likely to be used.
For now it seems the best to keep it as it is: Mouse pointer enabled by default, description how to disable on the wiki.
If we had an information tag in the deviceinfo file, like deviceinfo_keyboard for the keyboard, a configuration file could be installed conditionally. Maybe we can guess whether the device needs a mouse pointer depending on deviceinfo_chassis or something else (pretty sure: no).
(Also the convergance thing remains unsolved but I think this one is generally difficult.)
I just now realized that unclutter-xfixes version 1.6 introduced new options --hide-on-touch and --start-hidden. I had a try and it looks like it's exactly what we need. I'll set up an MR.