Which drive is the active partition, why on earth would you have both a FAT32 & FAT16 drives, and whoever told you that FAT16 was preferred over FAT32 was telling you porkies, and now you have drives & partitions that the Wii will be confused with, as it was never meant to have USB Drives attached, never mind ones with multiple partitions.
My advice, take with a pinch of salt until someone suggests alternatives ofc, would be to:
Back up FAT32 & FAT16 drives to your PC
Remove FAT16 partition
Incorporate the FAT16 free space into the FAT32 partition
Mark as active the new FAT32 partition
Copy back to FAT32 all the stuff you backed up in the first place
Now run your HBC & Apps.