SQLPLUSW.exe prior to 8i's JAVA based tools does appear to hang and will also appear to lock your Windows box up. I suggest either running large jobs like this from sqlplus in UNIX or on Windows using plus80.exe from a command prompt.

Things you will check to make sure the inserting is happening (basing this on the fact you are following the LOOP example above)
-- Alert Log (shows redo/archive log switching frequent switching indicates inserts are occuring)
-- select * from v$session_wait;
-- Select row count from the other table
-- Also to speed things up drop indexes and constraints on this table and then recreate them when finished.