Well, I tried again, and again without success. I think the problem might be with having no SD card. I've tried opening the internal storage when phone is connected and there is nothing to see. Maybe that's normal, and maybe it's possible it won't work that way.
Since I don't want to give up, I'm going to the store now and see if I can buy a SD card. I'll try again.
Edit:
Well, I've got my SD card, and that's the only win for me. As I thought that I needed a SD card for step 13, (I thought maybe the install.bat would need some files from the SD card, but I guess I was wrong.) So, still no response after: Waiting for Device, connect USB cable now...
As I did notice that, when Flashtool is still running and install.bat is open, when I close Flashtool the install.bat starts, but it says: error: device not found.
I give up. I keep my fingers crossed for an easy root or other method.