Are there known parallelism issues with Sql Server 2016?
Problem was due to use of the Vmware CPU Hot Plug feature in combination with Sql Server 2016. 

This feature disables vNUMA and is not recommended by Microsoft or Vmware (see document Architecting Microsoft Sql Server on Vmware vSphere).  

Switching this feature off and then rebooting the server resolved this issue and it resulted in average query performance of over 50% as well as showing improved utilization of CPUs.

Since we were running this Vmware setting when using Sql Server 2012 and did not experience freezing/hanging queries, my guess is something in 2016 makes this environmental setup more problematic. It could be the new default "soft Numa" configuration in 2016.

Btw...the query plan did not seem affected by this Vmware setting.  You can however see a difference when you run select * from sys.dm_os_memory_nodes;  With Numa switched off there is an added "Node 1" and the virtual address space reserved in node 0 goes from 100% of max mem with no Numa to 50% of total max mem when Numa awareness in vmware is turned on.