Yes, you have to select your regions. Regions are going to be defined by joined curves or closed curves, no open curves, if that makes sense to you. If I have this in my head correct, join one half circle to one rail, to the other half circle, to the other rail and the command line should say "4 curves joined to 1", which is what you want. Then select regions, a little drop down box will appear, select the curves you just joined, it will show REGION in the drop down box, then click OK. Regenerate and that will fix your problem.
Another thing is if you just bought Rhino CAM new, you can set-up a demonstration with a tech over at Mech-Soft. Those guys are excellent. You need DSL or better, he will email you an invite link and then you will be logged onto his computer. You call him back and he talks you through some basic techiques and tries to answer all your questions, the whole time, he's using Rhino CAM on his computer and you see everything on yours. I would call just for the hell of it, it's a free service they don't advertise, only when you purchase Rhino CAM new though.