EDIT: NEVERMIND. THE PROBLEM WAS WITH THE EMULATOR.
PSA: The beetle saturn core for Retroarch, as of this writing, freezes at the end of Disc 1. Mednafen, however, (which is far ahead of the Retroarch core) works. What I did was I copied my saved game from my Retroarch directory to Mednafen. It takes some renaming and figuring out how that works, but I eventually got it working, and it got past the frozen screen.
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Got another bug. This one occurs at the end of Disc 1.
Got past pirate island, have the convo with Feena. The ship goes off into the sunset, fade to black and...
I see a very faded window telling me to hit any button to save the game and then insert disc 2, however nothing responds. It's as if the game freezes as it tries to show me that window.
Was using the Beetle Saturn core on Retroarch.
Included is a save file on the ship, but also a savestate right before the ship takes off.