Updates require the TrustedInstaller Service to be running, which in turn depends on other services, which may not be running in Safe Mode.
You don't appear to have run the CheckSUR tool - or at least there's no logs for it in the files you uploaded?
I've never seen so much data generated by the CBS - 100MB in just over 30 minutes! There's so much data there that I'm having problems working out what's important and what's not.
running the CheckSUR tool may help.
Please download and save the CheckSUR tool from http://support.microsoft.com/kb/947821
(you'll need to look in the details for Method 2)
Run it - The tool can take anywhere from 5 mins to a couple of hours to run (or 'Install') depending on how much it has to do, and may exit silently - it may appear to freeze for most of that time, but be patient.
The result is logged in the C:\Windows\Logs\CBS\CheckSUR.log file - and an archive …\checksur.persist.log file
Then zip the CheckSUR.log (only) and attach it to your reply