It doesn't say for certain, but assuming the version of this they settled on (restoring components after the installation finished) is what they shipped in the original version of Windows 95, then no, I don't think this could have caused hangs in the installer itself (unless Win95 misjudged whether the installer had completed or not and started the restore process early?).

No, most likely bad algorithms for dealing with registry stuff. The kind of thing that worked well on tester machines with small registry sizes and exploded in the real world.

Someone thought the "commit all previous operations to persistent storage" step would take just 1% of the time.