A happy mac on the screen is good - it means the analog and logic board hardware is working, and the problem is very likely only with the disk or the disk drive. Does your last comment mean it has two floppy drives? You should be able to boot from either one, so try them both.

In order to get a happy mac to appear on screen, the Mac needs to read the first two sectors from the disk, and verify that the data begins with a particular signature. So that much must be working. It could still fail to read the rest of the disk for other reasons, like problems stepping between tracks or accessing both sides of the disk. Either problem can probably be fixed by disassembling and cleaning the floppy drive. Or if you really don't want to open up the case, you could consider an external drive emulator like my Floppy Emu, or an external SCSI drive with a pre-installed OS.