New install of Windows Server 2016 (build 14393.447 from ISO SW_DVD9_Win_Svr_STD_Core_and_DataCtr_Core_2016_64Bit_English_-3_MLF_X21-30350 with no updates) had an issue where Windows Updates would hang / freeze indefinitely at 0% progress.
When Windows Update ran it would briefly flash a list of updates that were available before disappearing. Then it would simply state “Updates are available” with a progress of 0%. Also the folder C:\Windows\SoftwareDistribution was roughly 500MB in size.
The solution was to re-enable the Windows Firewall which had been disabled immediately after the initial install and prior to running Windows Update for the first time. After enabling Windows Firewall, restart the Windows Update service (in services.msc) and then have Windows check for updates again.