I have an old Asus EeePC 1015T netbook with an HDMI (and VGA) output, a screen that glitches if I'm holding it wrong, a huge, tired, unreliable battery, a noisy fan that fails to cool it to less than skin-burning temperatures, and slightly less than 1 GB of RAM. I've seen Xubuntu, then Lubuntu, become slowly unusable on it; I've tried to install Arch then Sway, but although the device got kinda less sluggish, the leaning curve for a tiling window manager was still too high.
So here's a thought experiment: could I craft a Linux setup with a themeable yet cohesive Windows 98-like UI, that I can plug to an old monitor (1280x1024 should be enough) and that can be just responsive enough to do basic, focused tasks (writing, listening to music and webradios, browsing Wikipedia, perhaps playing Doom) using this kind of very limited hardware? The idea would be to have some sort of reliability: instead of installing an old distro and freezing all updates, I'd ideally go for a modern basis that I can upgrade without worrying of watching my setup collapsing on itself; so I could reproduce this setup on other, similarly old computers, and turn them into retro distraction-free appliances where you could chill with a classic Windows feel and Winamp themes.
I have some ideas but I'm not sure about the best approach. I've tried an immutable Fedora image (Blue95), but after a full day and night of waiting for the setup and rebase to complete, the end result was way too slow to be usable. Then I went for BunsenLabs on a Debian Trixie basis: it works okay performance-wise, but there's a lot of obscure menu items pointing to small apps to customize (you have to know what a "conky" or a "tint2" is, and also understand that the default panel is a third different thing). I'm thinking of trying postmarketOS, since the Alpine base sounds lightweight enough, but I havent figured out how to install it on my EeePC.
Could Wayland be possible with these hardware limitations? If so, how should I setup it? I guess labwc (pictured above) is the best fit for a Win9x experience, but what is needed afterwards? LXQt or Xfce or something else?
I'm curious to hear your thoughts!

Take a look at Q4OS, with its standard Trinity Setup you get something resembling Windows XP, but i think the Windows 98 look could also be easily achieved with some theming. The needed minimal specifications for the Trinity Desktop also look good: 350MHz CPU / 256MB RAM / 3GB diskspace
I'm not sure what happened to the old Redmond widget theme, which was essentially a transplant of the Windows 9X widget style, but if you're not picky, the .Net theme in the tdeartwork package will probably be Good Enough (or you could go for the different-but-equally-retro CDE/Motif experience). TDE itself, as KDE3, was originally expected to run on an average PC made 20+ years ago—I ran it for years on a single-core Athlon64 with 1GB RAM (and those were pretty good specs for a machine of that era). I don't know what else Q4OS might be carrying along with it, though.
If you want to go even lighter, look for something offering Fluxbox or Openbox as the GUI—they have enough stuff in them to be useful launchers out of the box, but don't have the overhead of the true DEs (configuring them may require you to mess around in text files, but you only have to do it once).
Anyway, your main issue is going to be getting any modern browser to work on a machine that constrained. (If your interest is only in looking at Wikipedia, Konqueror, which ships with TDE, can be made to mostly work if you force the use of Wikipedia's "vector" skin, but the current default skin breaks search and looks like ass. Konqueror's browser code is way out of date and not recommended for general Internet use.)