It just looks like your install.wim isn't correct, you could try manually running setup.exe from WinPE to check.
A better method would be to always start with a known untouched install.wim and use DS to script the patching, that way you can recreat it easily when new patches come out and old ones are superseded.
So I copy an untouched install.wim from my expanded DVD source to the WinOS directory then run (locally on DS, not when agent is connected):
REM Run on DS - Patch copied Install WIM
set os=win10x64
set Winos=WinOS008
set wim=.\deploy\%winos%\sources\sources\install.wim
set mount=d:\mount
set dism=.\Drivers\Win10x64\Microsoft\DISM
"%dism%\dism.exe" /mount-wim /wimfile:%wim% /mountdir:%mount% /index:1
FOR /F "delims=" %%A IN ('dir ".\FOS\Win10x64\OfflineCab\*.cab" /s /b') DO ("%dism%\dism.exe" /image:d:\mount /Add-Package /PackagePath:"%%A" /NoRestart /quiet)
"%dism%\dism.exe" /unmount-wim /mountdir:%mount% /commit
As a side note, I'd use 64 bit Windows 7 unless you have a compelling reason not to - I've yet to have any compatibility problems with 64 bit Windows 7 either at home or work.