Blu-ray full HD video tops out at 40 megabits a second. This is easily handled by any half-decent USB flash drive.

There is no need to emulate a particular windows platform, you just need a stable win32 library for compatibility.

It's pretty easy to write windows software that will work on any windows version from 2000. It's not much harder to support 95+. The basics of win32 have been stable for years.

The 16bit elements are now irrelevant (unless you want to run some very old windows games). Even Microsoft doesn't support 16bit software on the 64bit Windows versions.