An interesting thing that I somehow didn't discover until now: the Linker can't link a program with a packed intrinsic library file!
Of course, you can execute a program with a packed library after linking, but the linker has no idea how to read a packed library and will give an error if you try.
It turns out that, when you install LOS, it copies over packed copies of all the intrinsic libraries (IOSPASLIB, IOSFPLIB, SYS1LIB, SYS2LIB, QPLIB, TKLIB, TK2LIB, and so on). But then, when you go to install the Workshop, it replaces them all with unpacked versions so that you can link properly. This is why the Workshop installer is 6 disks instead of LOS's 5; the unpacked libraries take up some extra space.
Make sure not to install LOS back on top of the Workshop, or else it'll replace all of them with the packed versions again!
Regardless of whether you're installing LOS or the Workshop, the files on the first install disk must be packed, because there isn't room for all the necessary boot files otherwise.
And a progress update: I've finished writing PACKSEG at this point, and I'm just doing some stress testing and updating the build scripts to utilize it now. It takes about an hour to pack all the necessary files.