I recently had the exact same problem with Win98SE on VirtualBox on an AMD CPU. There the solution was to run
vBoxManage.exe modifyvm "Win98" --cpu-profile "Intel Core i5-3570"
I think there is a similar option in Hyper-V to change used CPU profile.
The XMS api doesn't support as much memory as you have installed - it uses 16 bit registers to specify memory sizes in units of KiB, so the maximum amount of memory it can report to a program that queries the available memory is just under 64MiB. Windows 98 generally expects applications to use DPMI to request memory rather than XMS, which was only included ...