The problem described seems to be a compatibility issue between the Intel components and operating system you installed, checking the DxDiag info you sent you have the Intel® Pentium® Processor T4400, ARK | Intel® Pentium® Processor T4400 (1M Cache, 2.20 GHz, 800 MHz FSB) Socket P, which has no support at all and the Mobile Intel(R) 4 Series Express Chipset Family does not support for Windows 10, here you can check the supported Operating Systems Graphics Drivers — Supported Operating Systems.
I would say that the Driver Update Utility will not work with incompatible components.
So what now, do I downgrade to Windows 7, or change the graphics drivers, what would be the better option?
Since you won't have updated Windows 10 drivers available for your machine, installing the Intel Driver Update Utility might not help you. However, if you want to install the utility, try right clicking on the install file and running as administrator. Let me know if that works.
I'm not sure what is happening on your PC. Maybe the problem is with the Windows installer service or something on the PC that is blocking the installer from copying files. I wish I had an answer for why you are seeing this, but I don't.
You might have to manually find downloads for your Intel components in .Intel® Download Center. If you're not sure which Intel components are on your PC, you can identify them with the Intel® System Identification Utility - Identify Your Product.
I'm sorry for the trouble you are having. If I find a workaround, I'll let you know.