So the fan "melted" or merely "failed" now? If truly melted, I for one would love to see a photo.
As to the need for a fan, it all depends on your usage. I for one baby my old Macs. I never have run my 512k for more than 2 hours at a time (obviously, as its not my only computer), and anytime I walk away from the machine for even 30 seconds I dim the screen to zero brightness manually to prevent burn in. I habitually touch the analog board side of the Mac to see how hot it is, and if it becomes extremely hot to the touch, I shut down the machine. So unless you are running the machine more than 4 hours straight a day every single day, you will do just fine without a fan. Eliminating the fan also means you will reduce noise and save anywhere between 60 to 200mA in the process too.
What if you want to occasionally want to run the Mac for many hours straight? If it's winter it probably won't matter (assuming you live where it gets cold in the winter). And in the warmer months of the year, just fire up the A/C and perhaps point an external fan toward you and the Mac (which you probably do anyway to cool yourself in the heat of summer).
In the days when these Macs were our main computer at home, there was a great need for internal cooling. But that doesn't necessarily hold true anymore. Again, it all depends on your usage of the Mac.