I think that Win7 32-bit should run Win16 programs (but I'm not sure about this). If so, I wonder if the key used to activate a Win7-x64 host can be legitimately used to run a Win7-x86 instance as a guest in a VM? It seems to me that that should be legitimate since it's all running on the same machine, but it probably isn't allowed by the activation servers.
Anyway, if you want free older 32-bit Windows installations - for short term use - you can find virtual machine images provided by MS here:
You can get a VM by extracting the image from the download package files - each VM is in a multipart RAR archive. The image will run for 90 days after it is first booted, so it's not good for long term use. however, fo playing a once in a while game, it's probably long enough. And if you needed more time, the game files could probably be copied off then copied back to a new instance of the VM.
Once the VM expires, you only have to extract the VM again from the files you already downloaded - there's no need to re-download. It'll be in a fresh-boot state and will work for another 90 days. This is different that how the IE test images used to work - the VMs used to have hard-coded expiration dates, and when those dates passed you had to download new VMs from MS. These downloads can be used indefinitely (as far as I know), but have to be 'reset' to the pristine image every 90 days.
The site currently has WinXP, Vista, Win7 Win8 and Win8.1 32-bit images with various IE version choices depending on the OS choice for a variety of virtualization software (VMware, VirtualBox, VirtualPC and Hyper-V). Great for testing (that's what they're there for), and probably good for other uses, too.