Brilliant @CaseySJ! Disconnecting the ethernet cable I had connected to the Intel i211 port fixed the problem. Sorry if this was a known issues; I missed it in reading through this thread.
I unplugged the cable and was able to boot my prior fresh 12.5.1 install that had hung. Moving the ethernet cable to the Intel i219 port also worked! It seems neither of the SmallTree drivers work for me on 12.5.1 (I tried them both). Suspect there is something else that needs to be set for the SmallTree drivers, but no worries, I'll just use the i219 port.
The hangs I was getting now make perfect sense. There is an issue with the SmallTree driver (or configuration on my system), and during Mac setup, the setup process is likely trying to determine the geo-location of the Mac via the WLAN IP address. This sends packets on the ethernet and hangs the system.
You also suggested not using
iMac18,3. I haven't yet had time to make that change and was curious why? Would you recommend
iMac19,1 or something else? Can I reuse my existing serial numbers with a new system product name? Hoping not to impact any of my registered software.