777 is rwx for all users – which is not correct for files that are not executable and it also gives write access to all users. You probably just want to chown to the pi user – but getting some information is better first eg the output of
ls -lRa /opt/retropie/configs
(via pastebin or similar – not posted directly to the forum)
If you have a blue background on the launch menu something else is wrong as you are missing a config or it can’t be read. You might do better to start with a fresh image – sounds like you have messed it up. I can advise better with the config listing.