Cubase 5 - Cubase only recording left side

I’m a bit confused because you reference the mic twice. I am guessing you mean you have the guitar in line 2?

The VST Connections set your possible connections for the project. If you add a 2nd mono audio track and change the input for the track to Stereo In Right (assuming you have that Device Port set to Line 2), then you should be able to record both audio tracks, with separate sources, at the same time.