Okay, something is wrong with my computer. I tried to restore on another computer, PC, and it worked. The thought of why I was having some trouble on my computer may be that the USB ports might be double assigned and it's causing mayhem when I tried to do an update and gives me the "USB" error, if that's what it really is.
The good thing was that everything was restored on my phone after I restored it on the other computer and ran the back up sync from my computer.
My temporary fix for this problem: I will be manually syncing my phone to the my computer and skipping the updates unless it's a crucial one. Remedial as it may sound but it's the only way I can ensure having a phone that works when it's my primary phone.