Our loving opinions of Microsoft, Windows and good/bad old Win98 aside, the problem is the dependence on guest-addition drivers for performance in vbox. Win98 is simply not supported. You can try it using Qemu which presents known, standard hardware emulation. I find it deadly slow there too. Problem may be the 16-bit nature of this old OS which prevents use of "full" virtualization in the kqemu kernel module. I believe that much of this code is also used in vbox.
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