For various reasons my pc seemed to have been getting slower in working with Office. No viruses present. So despite hating the new Office 365 icons etc. (hence I had rolled back to a prev version), I bit the bullet and did a full online repair.
Miraculously, jitter has gone, lines are smooth, and my pen is behaving as a mouse properly like it had before the weirdness set in. The random palm problem has also gone and I no longer have any blotches/random inking. Perhaps there was something in a Windows update that clashes with something in some basic Office component (perhaps also used in other software)? My drivers are unchanged.
So my problem appears to be solved, until the next Windows update I guess (I have them switched off at the moment as it seems there are so many problems with latest ones).