I did build a test image and used that on AWS. The new snapd version did solve 
the problem.
Some output from the booted image:

root@ip-172-31-46-218:~# snap debug seeding
seeded:           true
preseeded:        false
seed-completion:  23.224s


root@ip-172-31-46-218:~# snap list
Name              Version    Rev    Tracking         Publisher   Notes
amazon-ssm-agent  3.3.987.0  9881   latest/stable/…  aws✓        classic
core22            20241119   1722   latest/stable    canonical✓  base
snapd             2.66.1     23258  latest/stable    canonical✓  snapd


root@ip-172-31-46-218:~# cat /etc/os-release 
NAME="Ubuntu"
VERSION="16.04.7 LTS (Xenial Xerus)"
ID=ubuntu
ID_LIKE=debian
PRETTY_NAME="Ubuntu 16.04.7 LTS"
VERSION_ID="16.04"
HOME_URL="http://www.ubuntu.com/";
SUPPORT_URL="http://help.ubuntu.com/";
BUG_REPORT_URL="http://bugs.launchpad.net/ubuntu/";
VERSION_CODENAME=xenial
UBUNTU_CODENAME=xenial


root@ip-172-31-46-218:~# apt-cache policy snapd
snapd:
  Installed: 2.61.4ubuntu0.16.04.1+esm1
  Candidate: 2.61.4ubuntu0.16.04.1+esm1
  Version table:
 *** 2.61.4ubuntu0.16.04.1+esm1 100
        100 /var/lib/dpkg/status
     2.48.3 500
        500 http://eu-central-1.ec2.archive.ubuntu.com/ubuntu 
xenial-updates/main amd64 Packages
        500 http://security.ubuntu.com/ubuntu xenial-security/main amd64 
Packages
     2.0.2 500
        500 http://eu-central-1.ec2.archive.ubuntu.com/ubuntu xenial/main amd64 
Packages

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https://bugs.launchpad.net/bugs/2084667

Title:
  AWS Pro xenial images do not fully boot due to snapd.seeded.service
  never finishing

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