You don't say what STDIN is connected to. If it's a terminal, you're suffering from the standard behavior of line editing. You may (depending on OS) be able to turn off cooked/editing mode. To do this, you could use something like Term::ReadKey that does this for you.

As far as STDOUT appearing in line mode, you haven't turned off buffering there, have you? If you have, prints should appear byte by byte.