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You’re right there was a small nut way down the handle. Got it off!! The blue button turns a different color when your shower water is hot and therefore you can turn miser off. Looks like the leak is in the part of the pipe that is behind the wallTypically there is a small set screw that you remove to get the handle off. I am not sure what the blue button is. It could be a shutoff to stop water flow while showering. this allows the temp of the water to remain the same. I am not sure it is that. Turn water on and press the button and see what happens.
Thank you for attachments.That is part of a water miser system - allowing you to recirculate water back to your fresh water tank while waiting for warm water to get to the shower (instead of just running the water down the drain).