Sockets are not necessary per se, but very convenient in case one of the cache chips is dead or you want to upgrade at some point. You will also have to populate the jumper headers between the chipset and the cache chips that are currently hard-wired, since those allow you to set the cache size.
Regarding the BIOS, if I'm not mistaken the fake cache versions of this board (like yours) came with a BIOS that keeps the cache off but displays the "256K cache" message at boot time to trick users into thinking they have real cache. In that case the BIOS available at the Ultimate Retro link posted above should work properly with real cache. This is classic PCChips bullshit, at that time the motherboard scene was like the wild west and extreme cost cutting measures were taken (even downright fraud like this).
Regarding performance, the impact is noticeable (more or less depending on the application) but can be alleviated somewhat if the board allows you to set very tight main memory timings.