That's perfectly normal for the hand not to move. It doesn't.
The A1200 will have an animated disk going into a floppy drive.
Others will shoot me down if I'm wrong here, but as your A1200 drive works, it may be possible to open the cases and connect the A1200 drive to the A500. The fittings are different, so it won't all fit together nicely, but if you leave the tops off it should be okay.
Can anyone see a problem with this?