Yes, I tried to use a similar setup with NET USE, but got the same result as you did. The NET USE trick works in W2K but I guess you want to stick with W98.
Here are a couple of things which may work for you:-
1. Some BIOS's allow you to reprogramme the parallel port to LPT2, usually using I/O addr. 278 with IRQ 5 for instance.
2. There is an old DOS utility out there called PRNSWAP.COM which I think will do the business for you in W98. I understand this programme switches the I/O addresses of LPT1 and LPT2. I loaded it in AUTOEXEC.BAT and deliberately programmed a DOS application to print only to LPT2. Printer connected to the only parallel port on the machine, i.e. LPT1. Hey Presto! it printed! Since this small programme "flip-flops" between LPT1 and LPT2, what you could try is writing a batch file to start your DOS application, and insert PRNSWAP.COM just prior to the application line. I think if you use a "CALL" type DOS statement in the batchfile, you can put PRNSWAP.COM on the final line of your batchfile, and then it'll swap back LPT2 to LPT1 when you exit.
Hope that helps.
ROGER - G0AOZ.