Hmm, the cuesheet looks fine, the gap is there too.
Sega Cue Maker doesn't *load* anything, it merely looks at the contents of a directory (hopefully one containing an iso and mp3 or wav files 🙂 and makes a cuesheet for it. Yes, it works for mp3 and wav files.
It's unusual for an iso to be in raw mode (2352 bytes/sector) though. Could it be possible that there are in fact bad sectors in there? ISOBuster doesn't do any error checking but CDmage can perform this function and even repair light or moderate errors in sectors (the same way the hardware error correction in a CD drive does). It's possible that something somewhere leads to one of the game files being corrupt, therefore the game not running/freezing...
In *fact*, it's even possible that the data track is simply incomplete - again, neither ISOBuster nor SatConv would catch that though since all the file/directory info and the country code info is at the beginning of a Saturn game data track.