For now, in the BasiliskIIGUI's General Tab choose
Model ID: 5 (Mac IIci)
CPU: 68020
You are having the error because you are using a disk that was made for older Macs (older then Quadras). Once you get your hands on a 7.5 or greater disk, you can use a ModelID of 14 and a CPU of 68040.
"Basilisk II/JIT is an attempt to add a dynamically recompiling 680x0 cpu core to the original Basilisk II . This is achieved thanks to the adaptation of Bernie Meyer's excellent just-in-time (JIT) compiler for UAE to Basilisk II."
But basically, this makes Basilisk II run faster. Much faster, actually - some people report speed improvements of up to 100%.
To use B2 JIT, you will need to use a hacked GUI. Installing from this executable will give you it: