Ok, I just fixed the exact issue you were having on 2012R2 Server.   It appears to be a bug in the customer experience program code.    To verify if you have the same issue, download both Process Explorer and Process Monitor.    Run windows update to the point it hangs looking for updates forever with its progress bar constantly going.

Using Process Explorer's targeting tool, find the PID of the explorer.exe instance that is doing the update.   Then run process monitor and filter to that PID.

You will see repeated attempts to access a registry key that does not exist, over and over forever.   That key is at: HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\SQMClient\Windows

It is suppose to be a RegWord called CEIPEnable.   I just created mine and set it to 1, and boom.....suddenly no more hang.   I can install updates now.