You could not pin icons to the taskbar in Windows 98, no.
Windows 98 integrated IE4, which contained a feature called "Active Desktop".
This was not a Win98 innovation -- if you installed IE4 onto Windows 95 or NT 4, you got the same features.
Active Desktop included dockable "toolbars" that could be pinned to the desktop or to any edge of the screen. One of these became part of the taskbar, and was called the "quick launch" bar.
It's a separate area for program icons. If you launch an app, you end up with _two_ icons: one in the quick launch bar, _plus_ an icon in the taskbar as well.
The Quick Launch toolbar is still present in Windows 10 today, in 2020, and can be turned back on very easily: https://mywindowshub.com/add-quick-launch-toolbar-windows-10...
Pinning launcher icons directly to the taskbar was a new feature in Windows 7 and was not possible before that: https://social.technet.microsoft.com/Forums/SharePoint/en-US...