Machines of this vintage are generally not capable of running a modern office application suite.
Simply, they just don't have the grunt.
In the past I have experimented with Compaq Deskpro Pentium 200 MHz machines (and similar) with 64MB+ RAM running Distros such as Red Hat 8.0 and 9 which included an implementation of desktop office applications. The results were simply that they could not run the applications fast enough to be of any practical use.
These types of hardware platforms are useful as firewalls, packet routers, simple machines for old distros running custom software applications, etc but not much else.
So it would seem to me that sticking with Win98 would be the ticket if you have a system that currently meets your needs, and you are attached to it.
Regardless of the OS that you choose consider, if possible, upgradng the CPU, RAM and HDD. Given the age of this technology it is more than likely that you might find someone who would give you a couple of scrap machines from which you can cannibalize these components.
Given the machine's age and usefulness, I wouldn't spend anything other than beer money on it
So in a nut shell, if you would like to run a modern office suite then I would like to recommend that you consider obtaining a new faster system.
Ideally with a 1+ GHz processor, 256+ MB RAM (Preferably 512+ MB), and a reasonable 10+ GB HDD as a lowest spec. (Although you can run Red Hat 8.0 or 9 with an early version of Open Office on a PIII-450 MHz 128 MB RAM - but it's slow).
You might also like to try running AbiWord under Windows or a more powerful Linux machine (GTK 2.2.4 recommended). For details see www.abiword.org
Hope that helps