No, you are not stupid, as the whole thing is as cryptic as can be, actually. Provided that you have already saved the whole content of your Preferences folder in a safe place, delete in it (with Cubase not working, of course…) all the files with names starting with Media, before relaunching Cubase.
Have to go to sleep, as I have a working day tomorrow, starting early, but I’ll follow what’s happening tomorrow. Hope you’ll fix the issue before… 