Just for the record, Mac OS 8 is HFS only, only Mac OS 8.1 onwards supports HFS+, I only have Mac OS 8 installed on my Power Macintosh 7200/120, so I don't think formatting is the issue.
I figured that the problem was actually with how System 7.0 interacts with a disk with multiple volumes/partitions on the same physical disk, I tried several times to use control panel to change the startup disk, but to no avail. It always boots up from the first partition, so when I moved the installation onto the first partition, I was able to start up with System 7.5.5 on my SE/30:
:beige: :b&w: 
I figured that the problem was actually with how System 7.0 interacts with a disk with multiple volumes/partitions on the same physical disk, I tried several times to use control panel to change the startup disk, but to no avail. It always boots up from the first partition, so when I moved the installation onto the first partition, I was able to start up with System 7.5.5 on my SE/30:
:beige: :b&w: