Serial Monitor Not Working

Since you are seeing "USB Serial" under unknown devices that is an indication the driver has not been installed for the virtual serial port.
Looking on the Teensy website, I came across this page that has instructions to download and install the drivers for the Teensy.
Once the drivers have been installed, Windows will assign a comm port for the Teensy and then you can select it's comm port.

http://www.pjrc.com/teensy/usb_serial.html