You could use that disk by creating six 2.1GB FAT16 partitions and one
smaller FAT16 partition on it. With FAT32 you could create a single
13GB partition covering the entire disk.

The Win98 (and Win98SE) operating system can handle any combination of
FAT16 and FAT32 partitions, you don't have to use either file system
exclusively.

You can't have a non-partitioned hard drive - Windows won't access it.  You
may have a hard drive set up with a single partition for the whole 13Gb.  In
that case, the partition could not be a standard FAT16 partition. What
exactly are you looking at when you see the partition information?

Do
   CHKDSK
from a DOS prompt and copy/paste the screen display into a reply.

Regardless of the existing partitioning, the new drive should be partitioned
as FAT32.

There is no such limitation about HD size.  Partition size, yes.  But, you
said its not partitioned.  So, the presentation information is mute.
FAT16 is limited to 2GB capacity.
FAT32 with original fdisk is 64GB partition capacity.
FAT 32 with upgraded fdisk is 132GB partition capacity.

HD cluster size space allocation is the primary consideration after
partition capacity size limits.  There is less space wasted by FAT32 in a
nutshell (cluster size) per file size space allocation.  IE less HD space
wasted writing most files in general using FAT 32.

There are is one advantage of using FAT16 if the file size is not exceeding
2GB, and there only such a few or less large files to exist in such a
partition.  Speed.  Have only utilized this in practice a few times.  Very
limited.

Both FAT16 and FAT32 make dual copy FATs with dos 7.0/Win98  Prior versions
of FAT 16 had only one FAT, no copy.
Dave