Based on my research, please try the following:
1. Run this Microsoft Fixit and see how it works.
Fix the problem with Microsoft Windows Update that is not working
2. Test the issue again in Clean Boot Mode.
System Update Readiness Tool and try again.
4. Manually download Windows 7 SP1 Standalone Installer and install it in Clean Boot Mode.
For 64-bit Windows 7, please download windows6.1-KB976932-X64.exe.
Learn how to install Windows 7 Service Pack 1 (SP1)
Hope this helps.
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