You can buy an iBook G3 for ~$50 if by "something a lot like Classic Mac OS" you'd be fine with running actual Classic Mac OS. I agree with you that it seems like AppleWorks or Word 5.1 or something in OS 9 would be a nicer writing environment than the TUI word processor offered here.
Depends what you’re writing I guess. I experimented with a TUI word processor before on a very low powered machine and it was quite an experience to not be able to multitask. I just used it for personal notes / diary but it was really a revelation how often my attention slips in a modern OS. Oh let me do some searches on this topic I mentioned, let’s check mail and messages and refresh this page I had open.. and the writing mode is gone. I still prefer a notebook and a pen though and sitting outside