Different filesystems do have different strengths and weaknesses. My personal recommendation would be to use ext2 on that system. You don't have enough memory to use a journalling filesystem like ext3. FAT breaks too easily and suffers badly from fragmentation over time, plus you may have case-sensitivity problems with some programs. I'm sure there will be other opinions out there too.
32 meg is not a lot of RAM. However, I ran an old 486 machine for years which had only 20 meg, and that was usable. It would probably be painful to use for me now, but I had a lot of fun back in the late 90s with it
PDF rendering can be quite heavy. Some programs are faster than others. Which program are you using to view them?
On a machine of that age, I would guess that quite a lot of the speed is when your graphics card is blitting stuff about. You may be able to speed things up by changing the colour depth of your display. I used to use 256 colour mode on my old machine. This was ugly, but worked for most stuff I did. The ugliness was worth it as the 24-bit colour mode was painfully slow.