I didn't see you used the cd rom scsi. HFS standard is the format it must be.
Like mentioned a third party format tool or patched apple needs to be used. A disk made in OS 9 is not bootable in 8.6 or less. I backed up all my older systems on a Mac OS 9 cd backup and when put into an OS 8.6 or less computer it's says can only be read by OS 9.

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I know about the whole HFS/HFS+ fiasco, but I am not trying to make anything bootable at this time. I am just trying to get the SE to recognize the drive. One step at a time!

Maybe the drive is defective. It always mounted, moved data and initialized on the 5215 just fine until I introduced it to the SE where it would not work right. But putting back in the 5215 was still never an issue. I got a copy of the modified HD SC Setup and tried to format it again on the 5215 under 7.6.1 but the drive got hosed. It failed during formatting which hung up the Performa.

I am running Drive Setup now after a reboot. It says the drive needs a low level format. Will see what happens.