Display by Manufacturer Not Working

You're probably missing something as it's not a limitation of the Starter version.
Could you do a screenshot of your menu's hikashop options ?

What you created is a menu link which when clicked on will display a listing of the products of the manufacturer selected in the "associated category" option.

What you want to do is different. First you should not use manufacturers.
Just create your category tree like you explained, with a first level of categories and sub categories with the names of the manufacturers. Note that you can have several times the same manufacturer name in different main categories.
Then, in your products, use the manufacturers in the categories listing.
Finally, create a category listing module as explained there:
www.hikashop.com/en/support/documentatio...ml#categories_module

That will display a module with one link for each category. And upon clicking on it, it will display the manufacturers on the main area of the page. Then, when clicking on the manufacturer, you will see the products listing of that manufacturer of that category.