Well it all depends on what version of mame you want to use,
but you are quite limited with the speed of your system.
If i was you i would use dos with advancemame, .66
Its a bit hard to set up and to get soundcard working in plain dos.I have done something similar and setup win98se with 98lite and got it down to a really small/optimized
size so it loads in about 5 seconds. no web integration,no acpi.
and win95 explorer. it works well if you dont want to do too much.
i am still running advancemame in dos through windows to get the sound working
well, but dmame would be just as good if you are still using an early version and not wanting arcade resolutions.
I stick with what you got

and just improve your setup.