was the game meant to look that way or was it something that I did wrong?
I think it was meant to look that way. Ray is a top notch design author, one of our best, but his choice of fonts, frames and colors for some of the Realm designs have been criticized before. I think since he created so many designs for the Realm, he wanted to vary their looks as much as possible and use any font, frame and mouse icon set available from the community's archives`(hence the sci-fi font, for example). Anyway, you've already found the solution by yourself. If you don't like the looks of a hacked design run via UAShell, you can easily rectify that by deleting the according files from the DSN folder or replacing them with others you prefer. This includes:
FRAME.TLB, MENU.TLB, GEN.TLB for the general look of the UI (frame design and color, look of compass)
ALWAYS.TLB for the mouse pointer icons and the color of the text
GAME.FON for the font
COMSPR.TLB for the effect icons used in combat (e.g. death icon, corpse icon, missile icon, fireball icon etc.)
CBODY.TLB for the table of player character icons to choose from during character creation