So I just finally set this up in my launchbox and I had the same blackscreen with cursor only issue and then windowed mode with all the other stuff showing issue. Tried for the TPA player other method and it worked, however there was no way around a UAC pop-up for it. Long story short, I came back to this and realized that I had not checked the box for "attempt to hide console on startup" box when setting the loader up as the emulator, and that completely fixed the issue. Working great now.
TLDR; use the loader method, make sure to check the boxes exactly like the photo from OP for setting up the emulator.
Hope this will save someone else the hour and a half I spent about to pull my hair out before finally figuring out the user error, lol.