Let's start with the basics.

The administrator must obey permissions just like any other account. If some folder or registry key is marked read only or not owned by the admin, 0x5 can occur.

I don't want to upset you but the admin account is not God. They can change permissions as needed on almost anything but your question needs us to start with something basic to administration.

A. Why? I see no good reason for that.
B. Maybe. But the classic failure with .NET updates is well discussed and depending on which side you take, it is or is not a Windows update issue. This is why we have to know the KB number to do our research.
C. I missed where you wrote why you suspect that.

There are very well worn reasons for Explorer to lock up. I'm unsure where you are in your courses or books on Windows 2003 so let's just say it's one of those areas I wish Microsoft would do better. Be sure to take the SHDOC.dll message verbatim to google and add in quotes "Windows 2003" to see what others have written up.

This is not a desktop OS so be sure to avoid trying what you try on say Windows XP to 8.