IBM ThinkPad Compatible With Windows 7?

I've recently found an old laptop in the back of my closet. It runs Windows '95 currently, and has some start-up problems (but isn't very slow once I get it to work). I'm not an expert at computers, but I can say that it's an IBM ThinkPad built around 1999, as it is the lowest year available in the time setup. I want to update it to Windows 7 so I could maybe give it purpose again. Currently, it tries to use dial-up connection, has no USB ports, but does have a CD drive. It came with an external floppy disc drive. I've searched around on Google for a day or two to see if this is even possible. From what I've seen, it's possible to jump from Windows 95 to Windows 7, but I don't know if anything about the computer itself can change that (e.g. the space on its hard drive, its lack of modern ports, its lack of wi-fi connection). I have a full copy of Windows 7 on the CD, and I can put a CD in the laptop itself, so I see no problem there. My major fear is that I'll try to put in the disc and it automatically erases everything on my hard drive or kill the computer because it's too much strain on an old system.