So I'm not 100% on the exact way you have set this game up, but I seem to have encountered an issue straight out the gate.
I noticed that you can get bone from digging dirt. Doing so does produce a bone after a while, but in doing so the dirt is not returned. If that's intended, the recipe should be updated. If it isn't, that's where the initial issue is.
You can place a sappling on any block, so I figured that if the recipe was just incorrect maybe using bonemeal on the sappling when it's placed on any block would then allow progressing and you could make dirt later, but upon using both of the resulting bonemeal a sound is played and the sappling vanishes, but no tree grows. This effectively makes you unable to do anything else in the game. I know that trees do grow on their own, but I figured you'd put in some way to not have to wait for up to an hour to continue playing. I tested this over multiple worlds as it only takes a few minutes to make a new one and get to that point again, and each time it results in the same thing. No mods are loaded that didn't come with the game itself.
The first dirt is supposed to be destroyed to get initial supply of bonemeal, this is intended. Make mulch from tree trunks and leaves, craft it with bonemeal to make more dirt. Combine mulch with dirt to turn it into bones easier (don't have to dig dirt over and over). You can also turn it into brown dye and then craft it with bonemeal which gets you brown corals: can be used to produce bonemeal more efficiently in terms of tree material but requires digging the corals with a pickaxe to get coral skeletons. You might want to check the craft guide.
Pretty sure you can only grow saplings on dirt and similar nodes. IDK what happened with your sapling though, shouldn't just vanish like this. To grow trees instantly you'll need some kind of light, either daylight or artificial, otherwise the trees ignore bonemeal (but they might still grow on their own i think?).