How to format usb to fat32 or fat16 as no fat32 option for formatting?

I typically do this thru CLI.

1-Insert a USB flash drive into a running computer.
2-Open a Command Prompt window as an administrator.
3-Diskpart.
4-List Disk

In the new command line window that opens, to determine the USB flash drive number or drive letter, at the command prompt, type list disk, and then click ENTER. The list disk command displays all the disks on the computer. Note the drive number or drive letter of the USB flash drive.

5-Select Disk #

At the command prompt, type select disk <X>, where X is the drive number or drive letter of the USB flash drive, and then click ENTER.

6-Clean

This command deletes all data from the USB flash drive.

7-Create Part Pri

To create a new primary partition on the USB flash drive, type create part pri, and then click ENTER.

8-Select Part 1

To select the partition that you just created, type select part 1, and then click ENTER.

9- format fs=ntfs quick  or   format fs=fat32 quick

To format the partition, type format fs=ntfs quick, and then click ENTER.
If UEFI use   Format fs=fat32 quick

10-Active

Type active, and then click ENTER.

11-Exit

Type exit, and then click ENTER.

12-Open mount ISO file
13-In command prompt change drive to ISO mount drive... ie E:
14-change directory to BOOT... cd Boot
15-type BootSect.exe /NT60 F: (F: being your usb drive)
16-copy the ISO Mount to the usb drive

http://technet.microsoft.com/en-us/library/jj200124.aspx
http://www.computerhope.com/issues/ch001366.htm