There's a lot going on in this report. More than I can decipher. We need precise command lines and full tracebacks.
I'd also suggest you simplify the situation. Try using "instance fg" or "instance console" before you start trying to get it going as a service.
Windows is not a good choice for a production environment for Zope/Plone, so there's no particular reason to try to run it as a service. And, if you do, you'll have to consider things like admin rights. Running in "console" or "fg" (debug) mode is adequate for development or evaluation.