The problem is that the new kernel does not fit on a floppy. If you already have grub and the iso images, check out this howto
of how to create an upgrade grub entry. You can then point the installer at the hard drive for the images, or a http, ftp, or nfs server for a network install.
If you have a recent BIOS that supports booting from USB you may be able to put the image on a USB drive.