When in shore power mode, does the AC gauge work? Both line 1 and 2?
If so, it may be time to break out the voltmeter and start checking the output from the genny thru to the panel.
Back to the panel settings for genny use...
With all shore power off, and all accessory breakers off. After you start genny, and slide the lockout to switch to Ships Power, does the indicator on ships power light? Is there voltage showing on gauge for line 1?
If not, stop. That tells us the power from the genny isn't supplying power to the panel. Parallel switch is there for connecting line 1 power to line 2. (Hence the lockout slider on the line 2 shore power)