If you think about NES Classic Mini-like devices, I don't see the point in even bothering with real hardware. Nor do I see the point in using real Win9x/DOS on this. You can't even preload those legally on the end product, so the device will require quite a lot of setup, it will never be plug'n'play.
Instead, why not just focus on actual games?
1) Use existing sourceports for Doom, Hexen, Heretic, Quake, Descent I/II, Duke Nukem 3D, Shadow Warrior, Wolfenstein 3D, Commander Keen, Prince of Persia, System Shock, Tomb Raider, Ultima VII, Star Control 2 (I'm sure there are many high-quality ports of DOS games I am forgetting). Use ScummVM (loads of LucasArts/Sierra games, loads of RPG games like Eye of the Beholder/Lands of Lore/etc).
2) Preconfigure those ports for gamepad (all of them are playable that way).
3) Get any ARM board, like Raspberry Pi/etc (most mature source ports are available for ARM). Make a nice nostalgic case.
4) Get EmulationStation, make a nice big screen theme and layout for games and their mods. Provide options that could be important for PC ports (like adding custom GM soundfonts, ROMs for MT-32/GUS emulation, maybe even Glide support).
5) Preload shareware/demo game files for legal reasons.
6) Provide a tool to import full data files from legal GOG/Steam/CD versions of games from your modern PC/Mac to an SD card.
7) Provide a tool to loads WADs/mods/extra maps (so you can play Brutal Doom)
8)...
9) Profit, you have a nice $100 plug'n'play system that can play a lot of DOS classics on a big screen with an Xbox/PS bluetooth gamepad.
I'd definitely buy that if software was polished. Even better if it was a handheld (tricky, because you really need to nail down controls).
There is an abandoned project to provide ports of PC games to Anbernic emulation handhelds (they run EmulationStation on RK3326 chipset). It's pretty rough, and you kinda need a better SoC than that (it's not enough for heavier Doom WADs or games like Half-Life). But you can see just how many games are available for ARM. And that's even without ScummVM/DosBox-pure.
On second thought, maybe there's already a similar project for Raspberry Pi? 🙂