Windows 98 is a fragile beast that really doesn't like changes, Back when it was my main OS I would do a clean install at least once a year.
Now that it's only used for very specific tasks (playing a set number of games I own) but making system changes still poses the risk of making windows unstable.
My tips are
Install Windows on a smaller partition, I find 2GB is enough. Install games and store a copy of the Win98 CD and drivers on a 2nd drive/partition.
This not only speeds up re-installation but also scandisk when windows does not shut down properly.
Install only what you need.
It can be tempting to install old programs, updates, enhancements, tweaks. but are any of these necessary on a computer that really just needs to be able to play a few games from time to time.
Less that's installed, less to got wrong.
Install all your games in 1 hit.
Installing/ uninstalling games is the best way to break windows. If you install everything at the start you'll find out early if something kills your setup and you can troubleshoot, Do another clean install then hopefully your setup will remain "static" for a number of years.
Also many games don't need to be reinstalled, so if they are on another partition/drive you can simply run the exe. This also means your system wont get unnecessary add on programs or registry settings.
That said I've never had software kill an entire partition. I'd also be looking more at the hardware side of things (different drive, cable, etc)
With all that said I've never seen software kill an entire partition.