ExSimGuy
First the easy part. Windows 98 SE is still available here from suppliers like Simply, Action, Dabs etc at about £70 plus carriage. E-mail me if I can be of any help on the spot. Not surprising you can only get ME where you are! (Ha Ha, bad joke!).
You're right that, as you describe your system, DELTREE would not be suitable for you in the way that I suggested. In my Win 98 istallations, Program Files comes straight off the root directory (ie C
Program Files) and the C
Windows directory is solely for the system.
Its true that when you do DELTREE on C
Windows you lose Cookies, Desktop, Favorites, Start Menu and lots of stuff you're used to seeing and you do have to reinstall all main programs. This is to do with Registry entries. But if there are applications or support folders/files you don't want to lose, try copying them to a safe part of the HD(s). Hide them if you want to put them out of harm's way.
But if your current Windows system directory is called Windows98, why not re-install to a directory called Windows and copy over your Favorites etc? If this is no help, maybe I need to know more.