OK, so all the above work has turned out to be inconsequintial...
Apparently ActiveReports does not care for OpenType fonts. I'm sure someone will write back and say they use OpenType fonts just fine. I can't explain the technicalities for this issue but some OpenType fonts are tricky.
Turns out the font I was using is definitely an OpenType font. I found a font conversion utility:
http://www.geocities.jp/meir000/font...2009_10_28.zip
It runs in a self-contained linux like environment. You simply run a batch file, the program launches with a dialog asking to open a font. Choose a font, it opens and you can see all the characters. Under the File menu choose "Generate fonts". In the next dialog change the font type to TrueType and change the filename/extension as necessary (TrueType should be .ttf). reinstall the new converted font and ActiveReports will play nice.