Question: I think more frequent salary raises would be good for employee engagement. Rather than an employee "holding their breath"/working for a year and asking for a $5000 raise, why can't the employee feel comfortable asking for a $416 raise every month?

I know there are strong cultural norms surrounding this, but i partly suspect that all of the norms originally evolved in reaction to administrative and technological realities of processing employee pay raises in resource-strapped HR departments. Are there known barriers: HR technology, Legal, Accounting, Executive mindsets (business training?) that interfere with more frequent, low quantity salary increases?

Answer: 
The administrative realities of dealing with salary haven't changed appreciably in a long time. Dealing with monthly raises would be a huge amount of human effort.

In general, salary increases are tied to performance evaluations. That generally makes sense-- companies want to give larger raises to better performers, average raises to average performers, etc. Annual performance evaluations are generally a really big deal because you have to ensure that different managers are giving equivalent evaluations so that the teams of easy graders don't get all the raises but that you can also give solid raises to many people on really good teams. That requires quite a bit of interaction between managers and their teams, management with peers, managers with HR, etc. No technical enhancement is going to make that process substantially easier, the complexity is all around human interaction. Plus then HR generally wants to do checks to make sure that people aren't being discriminated against-- if women in role X are getting systemically less than men in role X with equivalent evaluations and tenure, that's something that probably needs to be addressed.

If you wanted to regularly do monthly raises, you'd need monthly performance evaluations for every employee and you'd need to replicate the various balancing tests every month. If you figure that a manager has 10 direct reports and a reasonable performance evaluation takes at least 2 hours (an hour to prepare the evaluation and an hour to go over it with the employee), you're looking at 20 hours of work every month or 12.5% of the manager's time just on performance evaluations. And that's likely an underestimate-- good managers are going to spend more time evaluating an employee. Add in the time required to normalize results across the company, figure out the budget for raises, figure out market rates for various roles and how those have changed, negotiation to determine whether a manager is an easy grader or just has a really good team, etc. and you could easily double that so every manager would spend 1 in 4 work hours just on performance evaluations.

Then there is the issue that evaluating performance every month is tricky. Evaluating people annually gives both managers and employees time to average out highs and lows. Monthly evaluations are going to be much more variable so you're going to have a lot more people that are upset about a bad evaluation. Generally, people are going to be a lot more upset about, say, 2 poor evaluations than they are going to be happy about 10 really good evaluations. A single annual good-but-not-great average would generally lead to much less strife.

Of course, you could do annual evaluations and monthly raises. But that would mean that instead of getting a $1200 annual raise after your annual evaluation, you'd get a $15 or $16 monthly raise for the next 12 months (which works out to $1170/ $1248 over the course of the year-- you can't just divide the annual raise by 12 to get a monthly raise otherwise your salary in month 12 would be $1200/month higher not $1200/year higher). That would give people steady increases but the increases themselves would be pretty small-- a $1200 annual raise sounds a lot better than 12 $16 monthly raises.
Another point of human psychology to consider is that people prefer to get a raise that is actually meaningful in terms of a noticeable difference in their paycheck. So suppose the raise is 3600 a year which works out to 300 a month. Now you see a lower amount after taxes. So that works out to maybe 150 that you can actually spend. If you got the equivalent amount one month at a time, you would get a little more than an extra 10 a month every month, Works out the same but not so encouraging is it? And much easier to fritter away without noticing. If you are paid biweekly like most people it is roughly 7-8 a paycheck before taxes which equates to about 4-5 afterwards. This is not motivating to any person I know.