I look forward to it. I've often contemplated building a mini atx system into unusual cases. But your project a full step beyond all that.
This one is my second attempt. The first was fitting a full windows pc inside an NES case. I succeeded. It was a flaming piece of junk on the inside and packed more tightly than it should be but I did it. PSU, motherboard, DVD drive, SSD hard drive. You probably want to look at nano or pico itx motherboards. Nowadays they come almost as small as the Pi and can run Windows. I wouldn't recommend Windows 10 unless you run LTSC N. Really wouldn't recommend 7 but that's better than 10. Probably the best you could do for a custom fun project like that would be 32 bit XP. Gives you some ability to run some modern software as well as being able to run anything back to the DOS days. Install an emulator (check out GameEx or similar) and you have yourself an emulation station. Connect it to a network attached storage drive and you have a full blown custom entertainment network. Synology is totes awesome so you should check that out. Absolutely insane what they can do.
For example, this bad boy right here is a pico itx dual core celeron. Yeah, it'll run Windows.
If you really like the idea of building a custom emulation station and really want to get your hands dirty, look up "Nintendo on a Chip". You can get some custom builds pre-made for you instead of making your own from scratch. You can get internal converters to keep the original NES ports but plug them directly into USB (same thing for SNES, and N64).
You could even make one small enough to fit inside an NES cart. https://www.instructables.com/NES-in-a-Cartridge/
Oh, and you can get the connector to dump NES cartridges. Hook one of those bad boys up, get the right NES bios, and some software (might have to write your own) and you could plug a Nintendo cartridge directly into your PC (that's how they dump the ROMs for the emulators). My ideal build would be something like that where when you turn it on and it has a cartridge in it, it boots to NES but if not, it boots to windows. I once built a PC with linux on the motherboard so if your PC didn't boot, you would still have an OS to troubleshoot with. It booted in 6 seconds and that was before SSDs were around.
This IoT stuff is lit. At my last job, I wrote all the software and wired it through AWS so all a customer had to do was press a button on a cell network connected custom device and it would place a refill order for them. People really truly have no idea what a person without a tech factory can make any more. That's why there's so many smart home devices you can just buy. Some dude gets a killer idea, makes a prototype, runs it through tests, maybe he gets an investor (or maybe he makes them to order), has a silicon chip printed, and lists them for sale. Combine that with 3D printers that can extrude metal. Honestly, there's no reason we can't live in the Star Trek universe right now (except for warp speed but they're making progress on that). It's absolutely insane. I mean, the latest phones have LIDAR on them. Can you believe that??
That's awesome man. You should definitely make a post when you finish it.