At the time you do
output.WriteTo(new FileStream(fileOutput, FileMode.Create, System.IO.FileAccess.Write));
the result PDF is not yet finished. Thus, obviously Acrobat Reader will complain.
To have the finished PDF in the memory stream, you have to wait until after
doc.Close();
This by default implicitly closes the output stream which might not be desired by you. Thus, you also might want to apply SetCloseStream(false) to the PdfCopy before.