There are 32 bit variants of Win 7 and 8, if you have a pressing need for 16-bit software. If XP Mode won't work then run an XP VM in Virtualbox. The reason 16 bit software doesn't run in 64 bit is (at a guess) because it makes no sense to emulate and have to support an entire 16-bit virtual environment when there is probably very little customer need for 16 bit apps.
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