You need to get into BIOS and select the option to boot from floppy first. If you don't know how to do this, watch the screen carefully when you first switch on; somewhere you will see an instruction to hit such-and-such a key (or key combination) to enter BIOS and change settings. If you don't see any such message, google "how to enter BIOS".
Once you're in BIOS, select an option to "boot from floppy disc first", or words to that effect.
You should be able to boot from your Win98SE floppy now. Once you've got a DOS prompt, run the command "ATTRIB C:\*.* -H -R" (without the quotes) and then run the command "DIR C:\". This should reveal all the system files in the root directory of C. If any of the system files has a filename longer than the 8.3 DOS standard (possibly as a result of virus activity), then assuming you can identify what the filenames are supposed to be, you can rename them manually and try rebooting (good luck).
Do the same for the Windows\System\ and Windows\System32\ directories.
If this doesn't work you may well have no alternative but a complete reformat and re-install. Unless someone who really does know what he is talking about can give you a better answer before then.