A Slot 1 mobo also opens up some other interesting options. A Via C3 Ezra CPU, ran through a slotket, is highly configurable from software, the speed can be set in fine grains from 386 to early Pentium III performance. I would go as far as to say it's a fully equivalent option to a SS7/AMD K6-2/3 system when it comes to flexibility.
Would also recommend GPU combination suggested above. Anything between GF2 and GF4 will be fine if you ask me, even the GF4MX variants, though there are probably people who are more sensitive to details than me that might disagree. Since you're specifically mentioning Diablo II, a Voodoo 2 card or two is almost a must have as a complement in my opinion. D2 really works best with Glide 😀
Would have used two sound cards, an ISA card for DOS, and a PCI card for Windows. The ESS Audiodrive (ES1869F) is a really nice SB compatible ISA card, that still can be had for peanuts. It's at least great to begin with, if you happen to become interested in the finer points of DOS sound later, you can always try to hunt down rarer and more expensive cards then.
The PCI sound card is even easier. Just about anything works in my opinion. If you want a more specific recommendation, my personal favorites are the ESS Solo-1 (ES1938) and the TB Santa Cruz (CS4630). But once again, just about anything will be fine for a first build, and those are just my favorites. Other users probably have very different opinions on good PCI cards for Windows.
The outputs of those cards can be connected to the same receiver through a mixer. A passive mixer consisting of a few resistors can be thrown together inline in a cable in minutes if you can handle a soldering iron, or ebayed ready to use for 20 bucks or so.
I know you didn't ask, but as for network cards, old 3Com cards are my favorites for retro use. The 3c509 and 3c905 are highly reliable cards, with drivers included in W98. Also, Realtek has always been really good with supporting older OS:es, wouldn't surprise me at all if even their current lineup of Gbit cards got W98 drivers. Haven't checked though. Their cards are budget ones, and they tend to tax the CPU to a higher degree than premium cards, but the drivers are small and rock stable, and they can be had for almost nothing. You won't however have the convenience of drivers being included in Windows.