you might want to step down to 10.3
I seem to remember that 10.3 ran a bit better on older machines ...
The amount of ram inside is doable ... I did the same amount with a G3 400 and was fairly happy back when
But you might consider putting 256 x4 in the machine. I'd save the money by not maxing out the ram.
How bad is your HD? If it's the original, I save the money from the ram and put in a decent speedy drive and you'd be much happier

Those older drives are really pokey ...