Setup/upgrade new 2022 SE to IOS 17

I’m trying to set up and transfer everything from my husband's old 8 iPhone to a new SE 3rd gen. It is going fine until it tries to install the software update. There is no option to skip/not do this. It downloads the IOS 17 upgrade then gets stuck on this screen every time with the little loading wheel. It won’t let me tap ‘install now’. Since I can't bypass to just upgrade, I tried doing upgrade via our Mac, but since the phone will not stay "unlocked", the Mac can't complete the upgrade.

I figure I need to update new phone to IOS 17 and then do transfer from old phone to new, but can't. I am going to try to just skip the transfer Apps & Data, and get it upgraded and then go back and set it all up in transfer with Quick Start. Not sure if it will work so I am posting for helpful suggestions please. Been trying to get this dang phone transferred all weekend!

Thanks in advance for any help.