Hello,
Welcome to the wonderful World of Macintosh. First, MAC is a Media Access Code number found on ethernet cards. When refering to a Macintosh, call it a Mac. :) There, now the style is set.
Couple things:
A) Looking at the specs, your computer is Beige, and it is a desktop, not a tower. Am guessing you have the computer called "Gossamer" that was released in 1997, and discontinued in 1999.
1) There are a number of websites that discuss processor upgrades... look at http://www.xlr8yourmac.com to start out with.
2) Highest amount of RAM? My source says 768 if you use non-apple RAM. It says there are 3 sockes in there, PC66 3.3v unbuffered 8byte x64 Low-Profile 168 pin SDRAM. 10 ns.
3) The computer shipped with Mac OS 8. You can run 9.2, or OS X, but those would be purchased items for you. Not Downloadable. YOU CAN download YellowDogLinux ( www.yellowdoglinux.com ) and run that. Think of it as "Red Hat for Macintosh". It runs well, runs robustly, and with MacOnLinux (MOL), you can run Mac OS 8 or 9 within a "window". It would not make sense to run OS X within MOL.
4) The hard drives in there can be IDE or SCSI (better verify that). But you should be able to get any size hard drive in there that you want (being SCSI or IDE), and with Apple's (or a third party partition utility), set them up as you need to. YellowDog comes with a partitioning utility, so you have some options if you wish to go that direction. Also, you might have a dual-channel SCSI in there... meaning you have one SCSI bus outside the machine, and a higher-speed one inside. 12 devices total if you wish to get fancy!
5) A PCI video card might work. I know of PCI ethernet cards... not too many PCI video. Haven't tried it yet. The display connection is a DB-15 meaning it is looking for a Mac monitor, but you can get DB-15 to VGA adapters, and use that. You should be able to get to 832 x 624 in the Thousands of colors range.
This computer should match your Moral of your story in your signature.
Have fun with it, and let us know how it works.
Christian