Here are some pictures of the IBM 5170

Very nice machine.

I think you should post pictures of the inside of the machine and also the rear, so we can evaluate what's inside it. Might want to take pictures first, and then remove each card individually and lay them out so you can take stock of what you have. If you do that I'd post pictures of all the cards as well.

First impressions:
-Those are IBM BIOS messages, and you mentioned BASIC, so it has a real 5170 motherboard, most likely.
-Check the value of the clock crystal to see what the clock speed actually is (note: it's 6 MHz, not 6 Hz). On mine, it has a 6 MHz chip, but someone upgraded the clock crystal to run it at 8 MHz.
-Nice, a 5153 monitor - one of the original IBM monitors that went with this machine.
-Dual 5 1/4" floppy drives. You'll want to replace one of those with a 3.5 inch drive for convenience. Probably will only be able to use 720K disks with it, but that's okay.
-That is not the original keyboard, and its layout is kind of odd. You can use a standard IBM Model M with this machine or try to find an original 5170 keyboard.
-Probably a CGA card - you will want to upgrade that to EGA to continue to make use of the 5153 monitor while gaining support for a vastly larger array of DOS games.
-Yes, you need to configure the hard drive in the BIOS. Post in here a picture of the drive and its controller card so we can help you out there.
-The base RAM is all in chips on the motherboard. You get 256K or 512K that way. Additional RAM is always on expansion cards. Since the BIOS counted up 640K, that means you have an additional 128K of RAM on one of your expansion cards. RAM above 1MB is extended memory, and will be counted by the BIOS but will be unusable without an extended memory manager such as HIMEM. Furthermore, between 640K and 1024K is a reserved area for BIOS functions and option ROMs, some of which you can sometimes use, but mostly is not available to you. So you pretty much have to expand your RAM past 1MB to get anything above 640K, and then your program has to be written to make use of it.

You should bookmark the following website, as it has a wealth of information on every possible aspect of this machine and its kin: https://www.minuszerodegrees.net

These old IBM machines are lots of fun to play around with. The configuration can be tedious to complete, but is usually logical and works if your hardware isn't bad.

Hi, I second all of this above! ^^

I have a few thoughts on this, though.

Instead of installing an EGA card, it might be interesting to leave the CGA card installed and add a Hercules card.
And a second monitor, maybe an IBM MDA monitor (IBM 5151).

That way, there's dual-monitor support. For AutoCAD, for example.
Or have Windows/GEM/GEOS running in useful desktop resolution.

Dual monitor:
https://www.youtube.com/watch?v=4zugZGBPTSA
https://www.youtube.com/watch?v=iSzFvOQp_XM

Old AutoCAD needs register compatible CGA:
Re: MS-DOS, S-100, hi-res graphics and AutoCAD ?

Switching DOS console output is possible via MODE utility (DOS 5; MODE CO40, MODE CO80, MODE MONO).

Leaving CGA card installed also enhances compatibility with games from early-mid 80s,
which use palette switching via registers.

Neadless to say that the CGA has Composite output, so a monochrome monochrome can be added.
Or an NTSC colour video monitor, to play games using NTSC artifact colours (Composite CGA).

CGA:
https://www.youtube.com/watch?v=iSzFvOQp_XM
https://www.youtube.com/watch?v=xNsK_F4JlG4

StarFlight in NTSC Composite:
https://www.youtube.com/watch?v=uvl8gcy-erI

If the extra Hercules card is not used, it can be used as a cheap UMB card.
There's a driver in IBM DOS that can do it, but needs an original Hercules card (no clone).

Memory upgrade. Generally good, but it depends.
If the goal is to play 80s games like on a Turbo XT, then Extended Memory maybe is not needed.
The contrary, it may even slow down the AT due to A20 Gate switching.

An Lo-Tech 2MB EMS card might be an alternative.
It's easy to install, not so expensive and EMS was a common technology in the 80s (on higher end XTs).
Some Windows 2.x applications can use it, too.
The Sierra Collection has newer versions of Space Quest 3 etc. which can use XMS/EMS.

Don't get me wrong, I'm all in for XMS/Extended Memory on an 80286 PC.
But then it has to have VGA, soundcard and a CD-ROM drive, too! 😁

He wants to play DOS games. Dual monitor is not very useful for that purpose, but EGA is.