I just created a new t2.micro and went through the 30 minute install. Setup ran without a fault. I took the default 8GB disk for the t2, so I had to increase the volume size before ./launcher rebuild app would complete, but once it had enough space it also ran flawlessly.
Whatever is causing Tim's problem, it isn't some software incompatibility between an AWS t2.micro running Ubuntu 16.04 and rubygems.
I didn't setup with a proper mail server (just my usual smtp.none.com), and I also (obviously) didn't setup letsencrypt, or https.
Tims problem is a configuration issue.