My guess is that for some reason the dos extender can't find any upper memory, and resorts to swapping.
I would try to fix the first problem (increase usable memory inside the dosbox, e.g. by installing himem.sys or something), and not spend time on the swapping stuff too much.
(probably it requires some form of cwsdpmi configuration with env vars or so that is usually not necessary, but that dosbox triggers)