Not all brands and models of USB drive work with that version of Linux.
See if you can lay hands on a SanDisk Cruzer, preferably an older one with 4GB or less capacity.
It should show up in the F2/Load and F7/Utility -> F5/File Ops menus as drive a:, b:, e:, or something higher, depending on whether the system is configured to expect a floppy disk drive; whether it is the first USB drive plugged in; and whether you have mapped any network drives.
After you plug in a USB drive, it usually takes the system five or ten seconds to detect and mount it. If you already opened a file menu (e.g. F2/Load) then you will need to press F5/Refresh before you will see the USB drive in the list.
If you are comfortable using Linux shell commands in a command prompt window, you can also view the contents of the /cncroot/ directory to see what devices are mounted.
If you don't have a floppy drive installed, you need to make sure that you turn that off in the BIOS menu. If you don't, you will always get that Floppy Drive Error message when you power the system on as the BIOS is telling the motherboard that it has a floppy drive installed but the motherboard can't communicate with it which is why it's displaying that error message. You could also have an issue in which the directory that you are using for the floppy has been accidentally created. Press ALT+F6 to bring up the Linux command window. Type ls /cncroot and press ENTER. What do you see? Plug the USB stick into the control and wait 10 seconds. Press the up arrow once which will automatically fill in the previous line you typed and press ENTER. What do you see?