Just for some of my input, don't make the mistake of trying to go too new. Ask the guy who thought 98SE would just work fine on a K8T800 Socket 939 mobo. Stick to what people used 98 on for what will actually work best.
If you are into MIDI like I am (not a lot of people are lol) and don't want to go out of your way to drop hundreds of dollars on a ROMpler, the SB Audigy 2 ZS has good support for 98 when you follow the guide here for the drivers+SB16 emulation (which in my experience worked fine in duke3d, wolf3d, and fasttracker2 albeit i was not in dos mode, i just launched them in 98), and depending on how much RAM you have, you can load some impressive SF2s which can greatly improve the soundtracks of certain games.
I would consider a IDE to SATA adapter, or maybe even a CF card or SD card solution. You can also just use some random HDD you have laying around as Windows 98 is not historically known to require large amounts of data transmitted and most likely will not kill it.
Tip, if you plan to dualboot 98 and XP, I have a really ghetto method that works well when finished. Install XP first but during the install make a 80GB or smaller partition, and install XP to the rest of the unpartitioned space. Then, install 98 but after it's finished, shut down and use the XP setup disc to access the recovery console and restore the XP MBR. Then, use the bootpart application here https://www.winimage.com/bootpart.htm to add 98 to the boot menu. You can use msconfig to set whichever one as the default.
PIII : ASUS CUSL2-C, Pentium III @ 733MHz (Coppermine), Voodoo3 3000 AGP, 384 MB SDR, Audigy 2 ZS,
C2D : ASUS P5Q, Core 2 Duo E8400 @ 3GHz (Wolfdale), Radeon HD 5750, 4GB DDR2-1066, 256GB SSD