I would:

1:wipe the drive and install 7.1: IMO it's not going to be very enjoyable in 7.6.1, which can at some points, be very resource intensive for a '030.

2:install Ram Doubler.(optional)

3:install Copy Doubler.(optional)

4:install Disk Doubler/Auto Doubler.(optional)

5:install After Dark/Pyro/Moire/Dark Side (screen savers)(optional)

6:install Macintosh Drag n' Drop.(optional)

There, you've got a very useful machine.

For games, you can go to the Macintosh Garden

I use my PB 160(12 MB RAM, 120 MB HD) for playing Deja Vu, typing with MS Works 3.0, ClarisWorks, and Word 4.0D, drawing with MacDraw II, and (slight) programming with True BASIC 2.5.