Because I want to use the OS3.1 environment without the .hdf method and I want to do this entirely using MorphOS, I came up with the following workaround for the "stuck at 12%" issue:

Obtain the following three archives:

e-uae-0.8.28.lha
e-uae-0.8.28-2.lha
E-UAE_0.8.29-WIP4.lha

OS3.1 needs to be installed by using version e-uae-0.8.28-2:
- Extract contents of 'e-uae-0.8.28.lha' and 'e-uae-0.8.28-2.lha' to the same directory
- Rename A1200.conf to .uaerc
- Place kick.rom in main directory (PROGDIR:)
- Create HardDisks/Workbench in PROGDIR:
- Add 'filesystem2=rw,DH0:System:HardDisks/Workbench,1' to .uaerc
- Startup emulation
- Insert 'amiga-os-310-install.adf' (Ctrl Alt F1) and start installation

During installation Installer complained about not having enough room for the contents of Fonts:

Back to the directory where E-UAE_0.8.29-WIP4.lha is extracted:
- Copy the Harddisks/Workbench folder from the old to the new location

To get the contents of Fonts: to your Workbench directory:

- Startup the emulation from the newer version of e-uae and open a Shell:

Code:
The specified command makes sure to copy all content except Disk.info

On a sidenote:

E-UAE creates '_UAEFSDB.___' files randomly inside the Workbench directory. To turn this off, add the following line to .uaerc

Code:

Getting additional files to your OS installation should be a lot easier now