The init.el file is a bootstrap (and a buggy bootstrap at that). It's supposed to replace itself with the tangled file obtained from init.org the first time that you run emacs - but it does not: it just produces an early-init.el file and that's all. It then reloads itself recursively as @phils has explained in his answer
The bug is that org-babel-tangle should be called like this:
... (org-babel-tangle nil "init.el") ...
Do C-h f org-babel-tangle for the details, but briefly, that makes init.el be the default target of all source blocks that don't specify a target (i.e. all source blocks in init.org except for the early-init one).
Note that the same change has to be made to tangle-init, otherwise the tangling and byte-compilation that are supposed to happen after you change init.org will fail as well, leaving the (tangled-on-first-invocation) init.el unchanged, even though init.org is modified.
Another possibility is to add a property drawer at the top of the init.org file to specify a default tangle header for all source blocks, which is used by all the source blocks in the file that don't specify one (IOW, all of them except the early-init source block):
:PROPERTIES: :header-args: :tangle init.el :END:
That will allow you to call org-babel-tangle without arguments.
You should report the issue on Sophie's Github page.
But I think you need to step back and not bite such a big chunk of code to begin with: you say you want to start small, but there is a whole lot of machinery here that you are not familiar with. I would start with just (require 'org) in init.el and a very small init.org file, do the tangling by hand and then look at the tangled file. If you had tried that, you would have seen that the tangling only gives you one file (early-init.el) and not two. You should read the tangling section in the Org mode manual and play around with small examples to figure out how it works. Then maybe you can tackle a literate configuration, but you don't have to have a bootstrap - that's a "clever" thing to do, but it's unnecessary: you can keep an init.org somewhere other than in user-emacs-directory, tangle it by hand, eyeball the produced init.el file to make sure it looks good and then copy it over the init.el in user-emacs-directory (I would actually save the latter before overwriting, to make it easy to recover from disasters).
elisptag: it is often misused (as in this case), so feel free to delete it. I would do it but (I'm guessing) I cannot while your edit request is still pending (I approved but it needs one more vote before it gets applied).