I actually recommend using commands. It's much easier to manage & you can assign a cursor to each command.
Alternatively since 5.x you could also use the current command & link an item to it as it's now possible to create custom Lua queries with the "if lua result" action part.
You need to create the cursors in the actual mouse cursors section of the editor. If you use the actual dragged item system then it will automatically use the item image & the interaction position will be in the center of the sprite, which isn't particularly great.
Here is the system I use for items.
You should be able to figure it out from the screenshots I have provided.