car will not shift into reverse and the gears feel like they are not functioning properly
Check transmission fluid level.
its standard, but there is plenty of clutch fluid
Just because it has fluid in system does not mean its working. Have someone push in on the clutch and check out the slave cylinder you should be able to see it move when clutch is pushed in. If not moving clutch master cylinder is bad or slave cylinder may have a small leak. Check for leakage at back of clutch master cylinder .
If all of that checks out ok you may just need to replace clutch. Worn out.
Looking for a Used Cougar in your area?
CarGurus has 213 nationwide Cougar listings starting at $1,421.
Search Mercury Cougar Questions
Mercury Cougar Experts