To format the hard drive, you'll need to boot to floppy, which should probably be as simple as rebooting with an appropriate floppy in the floppy drive.
Do you have a working version of Windows 95 somewhere that you can use to copy files to a floppy? Or if not, maybe one of your setup floppies is labeled as a "boot disk" or something similar. If you have Win95 running somewhere, you can put the floppy in the drive, go to Start -> Run, and type "sys a:", which copies files to the floppy to make it bootable. Then copy the format.com file to the floppy. It is probably located in C:\Windows\Command.
Assuming you can get a bootable floppy with format.com, boot from that floppy. Then run A:\format.com. For the smaller drive, you'll probably want to make the whole thing one partition. If you have a drive bigger than 2 GB, you may need to divide it into two or more partitions.