Ok, so I get to answer my own question. This is not an elementary OS issue, but rather a general Linux thing. Apparently, X likes to break inputs on upgrade.
To fix this, I just rebooted into recovery mode, enabled networking and dropped into root and ran apt-get install xserver-xorg-input-all
Just like that, I'm back in business.
I have been having the same issues for the past 1 month, never faced it before in my roughly 2 years of using eOS as my primary OS.
Running "wingpanel" in terminal seems to bring it back, but it's an active process in the terminal, so if I close terminal, I lose the wingpanel again.
Also the wingpanel only disappears when I click on the sound icon, the ...