That sounds like a fun project, although I'd recommend XP over Me. XP has a DOS emulator, and it's a lot easier to configure drivers for.
My favorite games from that era are Star Wars: X-Wing and Wing Commander: Privateer. Both games stood out as exceptional back then. Warcraft was also an excellent game. Command and Conquer is worth checking out too.
Edit: I'm pretty sure I played the first two games on Windows 3.2, so I'm not sure how they'll play on Me or XP.