The Hub doesn't need a static IP address, it's quite happy to use whatever address is available. Portal will tell you what it's using at the moment. However, things around it might care.. You for example. Hunting for an IP each time can be exhausting. So a Static IP helps you as well as other integrations you may eventually build out.
Factory RESET is not what we suggested and in this case, probably wouldn't help.... which is your conclusion too I think.
The blue light means the Platform OS is "missing". To get it back you perform the Factory RECOVERY (not reset) The "Update Tool" page you are showing is NOT part of the RECOVERY process.
Visit:
http:<yourHubIP>:8081 and observe the top most button. If it's:
Then click that and see if it streamlines the process.. If, after 30 mins you don't see the "Get Started" green page, then please go back to:
and follow that process. That's the one that will detect the missing Platform OS and fetch another copy.
