That I recall, both NeXTSTEP 2 and 3 will not directly boot off the CD unlike NeXTSTEP 1 did on MO.
You need to bootstrap the system with the included boot floppy which according to your dual MO bezel you do not have. Neither do you have a floppy drive (and NO they are not Apple's floppy drives). There are hacks however to dump the CD to a hard drive and then install to the same drive.
Go ask the forum at nextcomputers.org for additional info on this.
Also, are you trying COMMAND + ~ to get to the PROM?