No matter what they say above me, you obviously got Dosbox to work and you are able to mount something as c.
But whatever you are doing, you are making a big mistake with this:
#4: inserted cd. "start", "run", typed "e:\windows\wininst.exe" with e: being my cdrom drive and followed installation prompts. (should it be c:\windows\wininst.exe?). also went through the SETUP prompts after install.
You are using Dosbox to emulate Dos not windows. so do as lofty says and mount your CD-Rom drive in Dosbox as well (mount d e:\)
then change dir to d: (in dosbox with the mount command I wrote, d: is now your CD-Rom drive e:) and then type install or setup and it should do something 😀
To recap, my suggestion is to type the following in Dosbox (followed by a return):
mount c c:\westwood
mount d e:\
e:
setup (or install)
This assumes you have a folder on your C: Drive called Westwood. In the install program let it install to c:\ and whatever program name it wants (C:\Kyrandia perhaps - on your real drive this would be then in c:\westwood\kyrandia)