...a message box appears that states The application failed to load because perl514.dll could not be found...
Is that still the exact error message you get after moving to ActivePerl 5.16.2? If so, your uninstall and install didn't work too well. ActivePerl 5.16.2 shouldn't be looking for the perl514.dll file.
As for installing modules directly from CPAN, ActivePerl does not fully support that right away after install. If you're using a 32-bit version of ActivePerl, use ppm to install mingw and dmake from ActiveState's repository and then you can install modules directly from CPAN. For 64-bit versions, I believe that there maybe a few more steps and gotchas, but it's been over a years since I last looked into that situation and I don't remember all of the details. If you're not needing the 64-bit features (i.e. 64-bit integers), I'd recommend sticking with 32-bit Perl since it works fine on both 32-bit and 64-bit Windows.
In contrast, Strawberry Perl already comes with mingw and dmake installed. That means immediately after installing Strawberry Perl, you can start installing modules directly from CPAN.
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