The easiest way to fix your problem would be to change CONFIG.SYS
Change:
DEVICEHIGH=C:\DOS\EMM386.EXE RAM
to
DEVICEHIGH=C:\DOS\EMM386.EXE NOEMS
At the moment, your system is using 64kb of upper memory address space for the EMS page frame. If you specify NOEMS, you can use the EMS page frame space to load additional software high, freeing up conventional memory.
The other posters here have good ideas with using different software to reduce memory requirements, but the easiest fix would be to get rid of the EMS emulation (but keep UMB). You would need to change this back to the original settings if you have software that needs EMS memory (actually not that common)