I tried the manual update and it failed again. I then used the MediaCreation Tool and updated, which went smoothly. Started it before bed and the next morning did one final update and restarted and it says the OS is up to date.
Not sure how each update is rolled out, but when I look at the update history the KB4566782 is not shown. Either it just skipped this one, because a more recent update contained this update information or this update is not yet available to my PC because of some sort of metered roll out process for updates.
But so far at least, it says I am up to date and appears to have stopped the loop update as my hard disk is not cycling up to 100% usage.