Install Windows 98 Se In Parallels Desktop 3.0 For Mac

Hello,
I have been having trouble with this for a while, found this site, and figured this is the perfect place to ask my question. I have a Mac that I wanted to put Windows 98 on as a virtual machine. So, I downloaded Parallels Desktop, and got started. I have an old bootable CD from an e machines I used to have that ran Windows 98. I put the cd in, parallels starts to build the virtual machine, and then I get this..
Microsoft Windows 98 Start Up Menu
1. Restore Windows 98 - Will format HDD
2. Restore Windows 98 - Will not format HDD
3. Boot to DOS Prompt from CD Rom
When I select 1 or 2 it gives me an error and says my computer is not responding then ejects the disk. I can only get the command prompt (selection 3) from the CD (A:). If memory serves, I can enter a command in the prompt to install 98. I was thinking it was setup.exe, but it just tells me that is bad or invalid. What am I doing wrong here? How can I get windows 98 as a virtual machine here? Any help would be appreciated. Thanks,
Jay

To install and set up Parallels Desktop 12 for Mac, you need: Hardware: A Mac computer with an Intel Core 2 Duo, Core i3, Core i5, Core i7, Core M or Xeon processor; 4 GB of memory (8 GB recommended) 850 MB of disk space on the boot volume (Macintosh HD) for Parallels Desktop installation. INSTALL WINDOWS 10 ON YOUR MAC. Windows 98 Second Edition. Installing Windows XP on parallels Desktop - Duration: 12:23. Dibesh Raj Subedi 3,493 views. Google keep notes and lists.