Convoluted? Hmmmm ...
AmiPUP is a squashfs image of an entire Linux OS (albeit a small one) AND AmiKit running entirely from ram, so your problem with just "copying" AmiKit is that you're running out of space. You are trying to fit TWO installs of AmiKit into that space (even if you deleted the first one) -- not gonna fit since AmiPUP has all the memory limitations of any 32bit OS! To do what you're trying to do, you need to remove the first OS, remaster the system, boot from that remaster, and then add the version you want to copy. OR just install the system files -- much simpler!
As for not saving your configuration between boots, it sounds like a problem with your save file (which you created the first time you shut down) or that the symlink you created references a drive that isn't mounted by AmiPUP (did you add it to your fstab or use another utility to mount the drive before attempting to boot?).