Is there anyway to do this other than using Raycasting?

Thanks to Crazyman32 for creating a Module Script

Here the ModelScript You will need to create in the same folder as your localScript

ModuleScript

local Mouse = {}
Mouse.__index = Mouse
function Mouse.new()
    local player = game.Players.LocalPlayer
    assert(player, "Could not get player")
    local cam = game.Workspace.CurrentCamera
    local Ray = Ray.new
    local input = game:GetService("UserInputService")
        local button1 = Enum.UserInputType.MouseButton1
        local button2 = Enum.UserInputType.MouseButton2
        local button3 = Enum.UserInputType.MouseButton3
        local mouseMovement = Enum.UserInputType.MouseMovement
        local mouseWheel = Enum.UserInputType.MouseWheel
    local mouse = {}
    local mousePos, mouseDelta = Vector2.new(), Vector2.new()
    local clicking = {
        [button1] = false;
        [button2] = false;
        [button3] = false;
    }
    local function CreateEvent(eventName)
        local e = Instance.new("BindableEvent")
        mouse[eventName] = e.Event
        return function(...)
            e:Fire(...)
        end
    end
    -- Events ---------------------------------------------------------------
    local buttonDown = CreateEvent("ButtonDown")
    local buttonUp = CreateEvent("ButtonUp")
    local moved = CreateEvent("Moved")
    local scrolled = CreateEvent("Scrolled")
    -------------------------------------------------------------------------
    -- API ------------------------------------------------------------------
    function mouse:IsDown(inputType)
        return (clicking[inputType] == true)
    end
    function mouse:GetPosition()
        return mousePos, mouseDelta
    end
    function mouse:ProjectMouseRay(ignoreList)
        local pos = self:GetPosition()
        local ray = cam:ScreenPointToRay(pos.X, pos.Y, 0)
        ray = Ray(ray.Origin, (ray.Unit.Direction * 999))
        local hit, hitPos, normal = game.Workspace:FindPartOnRayWithIgnoreList(ray, ignoreList or {}, true, false)
        local cframe = CFrame.new(hitPos, (hitPos + ray.Unit.Direction))
        return cframe, hit, normal
    end
    -------------------------------------------------------------------------
    -- UserInputService Setup -----------------------------------------------
    local function InputBegan(inputObject, gameProcessed)
        if (gameProcessed) then return end
        local inputType = inputObject.UserInputType
        if (inputType == button1 or inputType == button2 or inputType == button3) then
            clicking[inputType] = true
            buttonDown(inputType)
        end
    end
    local function InputChanged(inputObject, gameProcessed)
        --if (gameProcessed) then return end
        local inputType = inputObject.UserInputType
        if (inputType == mouseMovement) then
            local newMousePos = Vector2.new(inputObject.Position.X, inputObject.Position.Y)
            local delta = newMousePos - mousePos
            mousePos = newMousePos
            mouseDelta = Vector2.new(delta.X, delta.Y)
            moved(mousePos, mouseDelta)
        elseif (inputType == mouseWheel) then
            local num = inputObject.Position.Z
            scrolled(num < 0 and -1 or num > 0 and 1 or 0)
        end
    end
    local function InputEnded(inputObject, gameProcessed)
        --if (gameProcessed) then return end
        local inputType = inputObject.UserInputType
        if (inputType == button1 or inputType == button2 or inputType == button3) then
            clicking[inputType] = false
            buttonUp(inputType)
        end
    end
    input.InputBegan:connect(InputBegan)
    input.InputChanged:connect(InputChanged)
    input.InputEnded:connect(InputEnded)
    -------------------------------------------------------------------------
    return setmetatable(mouse, Mouse)
end
function Mouse:__tostring()
    local pos = self:GetPosition()
    return ("Mouse <" .. tostring(pos) .. ">")
end
return Mouse

and here is a edited version of your localScript

local mouse = require(script.Parent:WaitForChild("ModuleScript")).new() -- here we request it 

local modelMode = false

local player = game.Players.LocalPlayer


local selection = Instance.new("SelectionBox")
selection.Color3 = Color3.new(0,0,5)
selection.Parent = player.PlayerGui


mouse.Moved:connect(function()
local cframeHit, target, surfaceNormal = mouse:ProjectMouseRay() -- here we use the modeleScript to get the target


    if not target then
        selection.Adornee = nil
    elseif modelMode then
        if target.Parent:IsA("Model") then
            selection.Adornee = target.Parent
        elseif target.Parent.Parent:IsA("Accoutrement") then
            selection.Adornee = target.Parent.Parent
        elseif target:IsA("BasePart") then
            selection.Adornee = target
        else
            selection.Adornee = nil
        end
    else
        if target:IsA("BasePart") then
            selection.Adornee = target
        else
            selection.Adornee = nil
        end
    end
end)

I hope this will solve your problem :D