Use an ISO with these hashes and an XML with content like this:
<BizHawk-XMLGame System="DOS" Name="SBSP Typing W98 verif">
<LoadAssets>
<Asset FileName="./w98.hdd" />
<Asset FileName="./SPONGEBOB.iso" />
</LoadAssets>
</BizHawk-XMLGame>
This bk2 sets the screen to 800x600 and 16-bit color; installs the game; and puts a shortcut on the desktop since it isn't done automatically.
This can be improved by turning off Control Panel>Display>Effects>"Animate windows, menus, and lists" for SB's launcher, and omitting the desktop shortcut part since it's been demonstrated (but not yet judged either way) that you can add the game to win.ini to launch it immediately instead.