Regardless of the BIOS setting, on Windows startup, the floppy drive will be cycled during the startup test. And remembering that 10 year old BIOS where not particularly forgiving regarding floppy issues, I suggest the following:
As it's a floppy "seek" error, it may be either, the floppy has gone bad (if in the drive), the floppy drive has gone bad, or the motherboard floppy drive service.
First, unless you are booting from the floppy, remove the floppy and try it. If you need to boot from the floppy you have two choices. One, try someone else's boot floppy. Two, try your floppy on another computer that has a floppy drive. Good luck with finding either.
Second, if you don't need to boot from the floppy, make sure a floppy is not in the drive. Start the computer. If you get no error, you are done.
Third, if after Second, you do get the seek error, then physically disconnect the floppy drive inside the computer. Two choice here too.
Note: the next steps involve disconnecting and/or removing hardware. Make sure the computer is powered down for each of those step. Computer equipment is not kind to plugging and unplugging with the power on.
One) If the floppy drive is connected to the motherboard, disconnect the floppy drive at the motherboard, and restart the computer into the BIOS. Make sure that the floppy drive is not listed. Restart the computer. If you now get a seek error, then I suggest it's a motherboard issue.
Two) If the floppy is connected to a plugged in card, unplug the floppy drive first, restart the computer, check the BIOS for no floppy drive. If you get the seek error, unplug the card, restart the computer, again check the BIOS for no floppy drive. If you still get the seek error, then again it points to the motherboard. If there is no error, then it's either the floppy drive or the card. So you can try to replace the card and/or the floppy. Good luck with that too.
Hope any of this help. I feel for you, my 9 year old Dell laptop runs XP, and so far it has run VERY well. It's been a tough little machine, but any day now...