Okay it was a licensing issue. To expand on what ShootingBLIND recommended, when I looked at HoudiniEngine -> Installation Info in UE5, the License Type Acquired was "Houdini Engine for Unreal/Unity", which is not the appropriate one for Houdini Indie. I went into my Licence Administrator, got rid of this license, and got the Houdini Engine Indie license from
https://www.sidefx.com/services/licenses/ [
www.sidefx.com] . I was getting issues downloading the license through the license manager itself because of the known bug on 21.0.559, so I followed these steps (
https://www.sidefx.com/faq/question/i-am-trying-to-install-licenses-but-receive-the-no-selected-servers-found-error-what-do-i-do/)
What plagued me, was even after removing this license and adding the new one, is UE5 still kept loading the old license, even when I deleted the temp files in Content/HoudiniEngine, as well as the the Intermediate and Saved folders from my UE project. However, as is typical of most IT problems, restarting my computer finally did the trick. Now when I open UE5 and recook a .hdalc node, it cooks properly, and the houdini engine indie license is referenced correctly in InstallationInfo