@gonefishin If it helps anyone, I fixed my issue(s) as follows:
To get spell check switched on again, in Opera settings, I had to choose a language in the setting just above spell check. Am sure that was set already but it was blank and when I chose English it re-enabled the spell check button.
For Outlook, there's obviously a clash between it and Opera. Opera does it's red lines to highlight spelling errors but when you right click them you get an Outlook pop up with editing options rather than the normal context menu Opera displays it's spell corrections in.
Through trial and error I found if you switch your email from HTML format (Outlook's default) to Plain Text you can then interact correctly with Opera's spell check function - a right click of the red underlined spelling errors now brings up the normal context menu where you can select the correct spelling.
This is only a workaround of course as you'll have to keep switching between HTML and Plain Text formats but it's better than nothing for the time being.