VMware Player "Manage > Install VMware Tools..." is Disabled

Even though it seems obvious now, the issue was that the Windows 8.1 guest did not recognize a CD/DVD drive. I had to add one manually in the virtual machine settings. I also found that although the Manage > Install VMware Tools... menu button was then enabled, I still had to manually mount the windows.iso file in the CD drive for the VMware Tools to display in "This Computer". Hopefully this helps someone.

For me what worked was to change the Floppy disk type to "physical". It doesn't make any sense because I obviously don't have a floppy disk connected to my laptop, but this post suggested it, and it worked.