Multiple ways to get going.... I can't recall if it was in the first edition of Win98, but I know Win98SE could boot to the command prompt straight from the Win98SE install CD itself... see if you can boot from the CD with your full Win98CD first.
If that doesn't work, you should get a Win98 Boot Disk made (if you don't already have one). As previously mentioned, you should be able to do so from bootdisk.com.
Whether from the first method (booting from the CD) or the 2nd method (booting from a boot disc), when you boot the computer, boot with "CD-ROM support".
If you need to format the drive, simply type:
Format C:
Once you have a clean formatted drive, at the prompt type:
E:\setup
(E-drive usually being your CD-ROM drive if you booted from a boot disk... A=Floppy, C=HD, D=RAM drive [temporarily created by boot disk], E=CD-ROM).
Running SETUP from your Win98 (1st edition) disc will install Win98 (1st edition)... complete this process... once you are done and in Win98, simply insert the Win98SE upgrade disc... it will prompt you to upgrade from there.
P.S.
You only need to use FDISK if you need to PARTITION the drive, or setup an active DOS partition (as-is the case with a brand-new HD). If it's a used drive, you only need to use the command "FORMAT C:" and nothing else. If you can't format the drive (and/or it's a new drive), use FDISK to prepare the drive and set an active partition (then reboot and format).