IDEA sees errors in pom.xml files and can't set Java version

I have a project based on a Maven aggregator like this:

<project xmlns="http://maven.apache.org/POM/4.0.0"
         xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"
         xsi:schemaLocation="http://maven.apache.org/POM/4.0.0
         http://maven.apache.org/maven-v4_0_0.xsd">
    <modelVersion>4.0.0</modelVersion>
    <groupId>com.bp.gem</groupId>
    <artifactId>aggregator</artifactId>
    <version>1</version>
    <packaging>pom</packaging>
    <modules>
        <module>../shared-parent-pom</module>
        <module>../my-configuration</module>
        <module>../my-utilities</module>
        <module>../my-security</module>
        <module>../my-web-server</module>
    </modules>
</project>

The aggregator project is simply this pom - it's not even checked into VCS.

I used the VCS menu to check out he other projects from version control and Intellij added them automatically as modules to the project.

All the poms in all the project / modules have a problem highlighted on their <project> tags - "org.jetbrains.idea.maven.server.embedder.CustomModelValidator......"  (shortened, but I doesn't explain much) - and there are 12 compilation errors due to Java 1.5 since Intellij is ignoring the pom maven-compiler-plugin config for 1.8.

Remedial Actions tried

I scrapped the whole Intellij setup on my workstation, invalidated and restarted the caches, and checked out the Java code and poms from VCS, and set it all back up in Intellij again.

Intellij during the creation of the modules even asked me to set the Java version level, which I did, to 1.8. 

The pom.xml errors and compilation errors re-appeared.

I just upgraded to 2017.2 today, but the problem persists.