2 things. How big the HDD the motherboard will support is based on chipset and controller. For example some old chipset like 440bx cannot see HDD above 120GB but some new chipset or controller card like a promise controller card or a scsi controller card is no limited to that.
98se out of the box cannot see above 120, but 98se has patches to see above 120 but you have to patch the OS however patching the OS wont matter if you have some old chipset like 440bx cuz thats hardware limited unless you are running off a PCI controller card that can support big hdd. It is a very similar statement to something like windows XP does not support bluray but later on microsoft delivered a patch so it would. Out of the box no, patch yes? easy.
Personally Id use the 120GB SSD. That should work with no problem and will be big performance increase over a HDD. Just make sure that you align the patrician and format it with Gparted, then once you have it installed disable scandisk and never run that or run defrag
With aligned partitions you will also have to run 98set with the arguments setup.exe /is to skip scandisk on install. Otherwise it will complain to you that theres something wrong with the partitian because it doesn't know what a properly aligned SSD is.
It's not confusing good you asked the question tho, lot of bad info on the internet that is either just old and outdated or nonsense.