I've done much of this stuff over the last year. It seems the focus here is windows based, but I would make a careful evaluation of what os's are needed for what functionality and see where that goes. I use qemu/kvm vit-manager style vm's on debian and it will definitely do what you'd like, but maybe a little steep. You could have users at logon autostart and stay in a particular vm. I believe shutdown would be 2 step, maybe logout of that user. Or, teach her a linux desktop that can do however much it can, and how to start a vm for w98. Not everything works with the basic passthrough methods of anything virtual, passing hardware a step below could be required. In this example, if the usb gadget doesn't function virtually, then you need to pass a physical plug in card version with usb ports that have drivers for W98. The host does not see it and only the vm does. I've only had perfect success with ren usb3 chipsets and XP . Not exactly simple, but then 100%. Some serial and parallel port devices may also require hardware passthrough for 100% compatibility.
I used to know what I was doing...