As for the compiler, Open Watcom seems to me the best choice in your situation. FrameworkPascal (written in the old version of Watcom) provides a 32-bit extender. Regarding the creation of FreeDOS virtual machines, get the tools from Microsoft SysInteral. These include a tool that creates VHD. After running FreeDOS in a virtual machine, you can just SYS VHD and run it anywhere. There are many ready-to-run ISO images for FreeDOS, it is worth mentioning Seagate Seatools for DOS, which is distributed with the FreeDOS kernel.
The best (but not only) solution to run everything that is probably XPMode in Windows 7 Pro. It launches Windows XP 32, which of course provides 100 percent transparent compatibility through its NTVDM with DOS-16-bit real mode, 16-bit protected (Windows 3.1) and DOS 32-bit extender. By the way, NTVDM is a feature that can be activated on Windows 10 Pro, but it is not yet clear what exactly can be done with it there.
XPMode is a free downnload from Microsoft that installs a free version of the 32-bit version of Windows XP on a virtual machine in Windows 7 Pro with a fully split buffer for cutting / copying, USB, drives, screen and network card (web access), It can Switch between window and full screen. XPMode installation is automated (after activating Windows 7 Pro VM). Microsoft provides various downloadable patches that update the registry to activate the virtual machine. There is a hot fix downloadable MS application that needs to be run in order to install on AMD Bulldozer architecture. XPMode sleeping on its desktop and virtual hard drives makes it a much more productive environment than a hardware system.
With a little extra work, Windows XP 32 bits can be installed on any virtual machine, including Microsoft Virtual Machine on the 64-bit version of Windows XP, as well as Oracle Box and VMWare. However, XPMode is probably the smoothest solution since some installations, such as 64-bit MS Virtual Machine for Windows XP, do not use the full physical display in full screen mode (only about 90 percent). If you install your browser and email in XPMode, you can live in full screen mode and forget about new versions of Windows.
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