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You have to make sure to completely uninstall and reinstall Steam. The troubleshooting page in Support shows you how here:
https://support.steampowered.com/kb_article.php?ref=3329-WUJN-5636
However, for some wacky reason I couldn 't access the folder Steam navigates you to. In order to access the HD>Users>[Your Mac username]\library\Applications Support folder, I instead had to open Steam, choose a game from my Library, and view it's Local Files. This will bring up the Steam Folder in the Applications Support folder. Delete that -- this will delete all your Steam games in the process so be warned.
Then just delete the shortcut from the Applications folder, be sure to empty the trash, and reinstall Steam from scratch.
Now Steam is installing a newly acquired game no problem. It installed, updated, and now plays fine.