Super interesting project.

How difficult is it to make this run on real hardware? I have an old D945GSEJT motherboard lying around, waiting to be put to use. It is now too old, and with its 32-bit CPU, it is difficult to run any recent Linux distro on it.

Its hardware, including the GMA950 and ICH7M, is not very MS-DOS-friendly. However, nowadays we have VSBHDA, and it likely supports the basic VESA video modes required by most MS-DOS games. Running Windows 98 is still impossible because compatible drivers are unavailable.

If I understand correctly, this project can replace some native hardware components with emulated legacy equivalents. It also preserves native CPU execution paths where possible, so it does not incur the overhead that a full-blown VM or PCem-style emulator would have on the same hardware.

I know this is very far away in the future, but could this also make it possible to emulate additional advanced hardware, such as running a Voodoo software rasterizer on a secondary core of a modern multicore CPU that would otherwise sit idle while DOS is running natively?

^Isn't that a nice Hackintosh board? :)
I vaguely remember that GMA 900/950 is natively being supported by Mac OS X 10.4 (Tiger) to 10.6 (Snow Leopard).

Edit: Nevermind, I was a bit off-topic again. About the "Voodoo software rasterizer".:
There's already one from the 90s, "3Dfx Emulator v0.2 from ELZ SOFTWARE.
It required roughly a 200 MHz Pentium, according to its readme file.
So it's technically possible on DOS, in principle.