OK, good - looks like your system generally is ok. If you're hearing half a second when its reporting 11ms, then clearly something is wildly amiss within Cubase. Maybe it is something specifically to do with 7.5.1, but AFAIK no-one else has reported an issue like this so if it is it must be very configuration-specific.
If you've disabled all other soundcards and its made no difference, you could try swapping to Asio4all drivers (free download). They're pretty good, and it will isolate if its a specific driver compatibility problem to do with the C12 and Cubase (which would be ironic if it was). I do know that Steinberg hardware doesn't have the greatest reputation for drivers, so it's not impossible I guess.
You can safely ignore the generic internal soundcard advice, as you've experienced its perfectly possible to get consistent, excellent results via USB from a solid manufacturer.
Good luck, keep us posted.