Have you verified the Oracle client is 32-bit?
Has the tnsnames.ora file on the client side been configured for a connection to the remote database? You can use the NetCA tool (network configuration tool) from Oracle to manage or add this connection to the tnsnames.ora file.
Sample location for the tnsnames.ora file:
C:\app\client\product\12.1.0\client_1\network\admin\tnsnames.ora
Does the sqlnet.ora file specify the EZConnect method as being available?
NAMES.DIRECTORY_PATH= (TNSNAMES, EZCONNECT)
Sample location for the sqlnet.ora file:
C:\app\client\product\12.1.0\client_1\network\admin\sqlnet.ora
Alternatively, you can try running the standalone mdb installer:
<ITCM DVD Media) --> WindowsProductFiles_x86 --> mdb --> setup.bat
It's the same mdb database, just wrapped in a java based installer. You can try it as an alternative, to see if it will get you further along. If it succeeds, then you can run the normal installer, and the result should be different now that the database and user accounts exist, versus having to create them in the first place.