Wow, a little piece of history you've got there.
If you are getting the diskette icon, it probably means the hard drive has either failed, or has a corrupt OS install. I would recommend getting a set of OS 7.5.5 install disks (available for free now, I think), and see if it will boot from the disk. If so, then see if it will format and install on the hard drive. If not, it would need an HD replacement. You won't be able to buy a replacement new, it will have to be used.
I'm always down for fun hobbies, but honestly, unless you have a 'museum' interest, I wouldn't sink any money into it. It has a b/w screen, a 16mhz processor, 8mb of ram, and only runs OS 7.5. You probably couldn't do anything useful on it, since it won't run any software that has compatibility with other people's software. And good luck getting it online...
If you decide it is too much work for no return, then don't throw it away, give it to a mac collector who will happily clean it up, and put it on display.
peace,
sam