When you initially format the usb before using win32, what file system (ie fat32) are you using? In windows you won't be able to (natively) read the usb and will say it needs formatting, this is normal as the drive is using a different file system that windows doesn't recognize.
It's entirely possible you are creating the boot usb fine, however your pc's bios may not support it. What type of PC are you using and its specs. For example a iMac will need to jump through hoops to get it working correctly.
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