You have essentially answered your own question while asking it. The root of the problem is that the emulator is not setup properly (evidenced by the system UI not loading). When Android can’t boot properly, it is likely to fail to start some system services (in this case, the package service).
The solution is to recreate the emulator, possibly with a different system image (in case the one you have been using is corrupt). If you are using an official image, try switching API levels, or switch from a GMS-enabled emulator image to a non-GMS image (or vice-versa).