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Can I install Linux on it and what would be the advantages?
I am not a computer wizard, more like a good user.
The idea is that I could carry it around (its really small and handy) and still be able to do better that it does now.
There are plenty of distributions you could use instead of Win95 - many of which run pretty fast. If you are using it for 'office' tools and browser then make sure you are comfortable using openoffice and firefox first (both of these have windows versions).
Test the windows versions of the packages you plan to use, if you are happy, install Linux using a minimal type desktop. Something like XFE (I think that's what it's called) is good for low-CPU machines.