You can still find Microsoft Office Pro 97 for sale from legit websites. I would recommend that or if you don't want to dump any money into it, OpenOffice would be a good alternative. I still have Office 97 running on a 486 Overdrive with no problems.
As for games, you can probably run Diablo, Starcraft, Quake I, Mechwarrior II, Worms II, Half Life, and Worms World Party.
If you're looking for a few cheap upgrades, it sounds like your laptop might have the old MMC style laptop processor socket. It might be worth it to find out because you can find low voltage mobile Pentium 266 MMX chips cheap nowadays.
There's a few over here if you're interested:
http://www.compgeeks.com/details.asp?in ... MX&cat=CPU