For now confirming the issue.

On the "trivial" working case the console is "less graphical" and it
boots through the splash screen.

On the guest as created by virt-manager it initialized a bigger, smother but 
also hanging console for the guest that hands on the splash screen.
So it loads the initial bits form the ISO, you select language, but then after 
selecting "install ubuntu" the load hangs on the splash screen.

Adding the cd permanently as:
    <disk type='file' device='cdrom'>
      <driver name='qemu' type='raw'/>
      <source file='/home/ubuntu/artful-desktop-amd64.iso'/>
      <target dev='hda' bus='ide'/>
      <readonly/>
      <boot order='1'/>
      <address type='drive' controller='0' bus='0' target='0' unit='0'/>
    </disk>

** Changed in: virt-manager (Ubuntu)
       Status: New => Confirmed

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https://bugs.launchpad.net/bugs/1714638

Title:
  Virtual Manager hangs booting artful iso

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