that HDD should work....
post a syscheck if you can (google it)....so we can see what you got under the hood...
you'll need cIOS249 at least to run USBloaderGX....though that loader is sorta obsolete now (i use Wiiflow cuz it's the prettiest, butCFG Loader is arguably the best as it's the most functional).
also, before going to far with a WBFS formatted drive, reformat to FAT32 and use Wii Game Manager to load .wbfs files to the drive instead..... or, what i do: extract an iso, the drag/drop it into a cmd executable called wbfs_file.exe (google it); this creates a folder with the wbfs file in it; then drag that folder to your wii's HDD wbfs folder...it's a manual process, and much less difficult than it sounds.... this is a big part why i like FAT32 formatted drives: you don't have to depend on a utility to load games...