Securing Win 98 pwl files & NT4 logons

One or more of my students have (anonymously) pointed out how easy it is to crack Win 98 pwl files by cracking the administrator password on our LAN and e-mailing it to me. I am new to the job, so these kids caught me with my pants down. How can make our LAN more secure? Is there a quick and dirty way to delete Win 98 pwl files (other than visiting each machine)?
Our PDC and BDC run Win NT4 SP6a. Our workstations run Win 98 SE.