the language file has been moved to here (with new VM versions)
/components/com_virtuemart/language/en-GB/en-GB.com_virtuemart.ini
This is something Virtuemart Developers did. The INI file inside the /language/ folder is not being used anymore.
But as i am seeing you have already figured that out.
About the "not being able to select shipping", provide me URL of your website and let me see (also give more details about it and don't make me search the problem on your website). I can't say anything without seeing the problem alive.
Regards,
Support