I now always install from HDD. I boot from CD (or floppy), prep the HDD, then copy the setup folder from the CD to the HDD. Win 98 is 105MB, Win 98se is 121MB. These can probably be reduced.
If you repackage the .cab files as uncompressed, you should be able to recompress the whole .cab set as a much smaller self-extracting 7zip or Winrar .exe. That plus the contents of a modified EBD could then fit on a bootable 100MB zip drive.