Use mem /c to see the actual memory size.
Use ver to see the actual win95 version. The speed of 166 isn't any
problem for windows95.

Remove the lines 18 (big) + 23 (small) from your script and run it again.
Also verify the correctness of your kixtart files (kix32.exe , kx*.dll) on
your system. Did you try to run the script also with KiXtart 3.63 release?
This version contains only extensions to your KiXtart 3.55 version.
Try also both kixtart commands (BIG/SMALL) in a small test script and this from a DOS box situation.
greetings.