I bumping this up because I was just looking for a solution for a similar situation. Once you have 3-4 pcs and 1 single desk having so many keyboards and mouses being a pain in the ass.
I was not looking for a full KVM solution because for the monitors I can easily switch the inputs I was also looking for a SOFTWARE solution instead of a HARDWARE.

My setup is:
Razer VIPR wireless gaming mouse + keyboard

Box1: Debian 9 Stretch
Box2: Windows 7 64bit
Box3: WinXPSP3
Box4: Win98SE

Synergy went commercial older versions can be found on the net, different versions are incompatible with each other. The company still provides Win7 package for request if you buy the software but anything prior forget about it.

There is the next one Barrier. It's a free fork of Synergy, the 2 is incompatible and to make things worse you need similar versions on the hosts. As far as I know this doesn't even support Windows XP or anything older and they are not interested in developing it either. At least this is a solution between Debian9<>Win7 to do the thing, for gaming not the best tho.

I have found another tool called Input Director. Now this will work between Win7 <> XP (XP needs an older version, they are still compatible) but there is a noticeable input lag with the mouse so not too good for gaming.

Any other software or hardware ideas are welcome.

Probably when it comes to retro nothing will ever beat hardware cause when you run a plethora of old systems like old Linuxes, Solaris, Novell, DOS, Win3.x, Win9X, WinXP there is no common software solution which will work across all, as I have showed the software I found hardly works on some of them.

With hardware solution as long as you go with PS2 mouse + PS2 keyboard for all PCs and as an input the same wired there are plenty of products however I think finding KVMs which can take USB input mouse and keyboard and push it out to ps2 is more challanging and finding some KVM where I can plug in the wireless dongle of my Razr viper gaming mouse and keyboard and it pushes it out to PS2 is just non existent...

VNC is what was used back when Win9x was currant so defiantly a good option.
PC anywhere was also big back in the day but died out during XP's lifetime so not sure how computable it is with Win7. I'm also not sure what versions added/dropped support for OS's

Both are fine for basic tasks but not for things with high refresh rates.
Best/safest bet then is a PS2 KVM, but if you don't have to attach the monitor cable if you don't want. Typically you only need the keyboard cable attached for it to register on the KVM that a PC is using that port.

This was the first result for me in Google while looking for Windows 98+modern machine keyboard/mouse sharing solutions, so I'd like to share the solution I've just gotten to work. Otherwise, apology for the necro.

I was able to get Synergy 1.3.1 (currently available here https://github.com/nbolton/synergy-vintage - 100% credit to the repository owner) to work on both my Windows 98 machine and my Windows 10 machine for use with controlling both with a single mouse/keyboard. Both machines are connected to the same router / same local network.

I used the same set of files from the Synergy 1.3.1 release zip file on both the Windows 98 machine and the Windows 10 machine - so no different version needed for the modern machine. This also worked when I set compatibility for the Synergy executables on the Windows 10 machine to Windows 7, so it likely also works for the original scenario from the op:

Configuring the modern machine
Run synergy.exe as administrator
Select Share this computer's keyboard and mouse (server)
Configure screens & links as desired (make sure to use the correct hostnames for your machines)
Click Start

Configuring the 98 machine
Run synergy.exe
select Use another computer's shared keyboard and mouse - enter the modern machine's hostname
Click Start

And that works for me. The Synergy client does not crash on the 98 machine when the mouse pointer is moved over to the 98's screen as in mhoney71's experience with the slightly newer version, and the program ran without any need for special DLL considerations. Could be worth a try if you haven't tried this specific version yet @mhoney71.