You know you could always install NetBSD on that thing... I ran it on a stock LCIII with 36 megs and it was fine in spite of me not having a clue what I was doing.
If you want to install a unix like os on it I would agree with luddite. NetBSD is a good choice. Another good choice would be Debian Linux. There are other options, but those would probably be the easiest for you to install and administer.
If I was going to run 7.5 then i personally would go no further than 7.5.3, beyond that seems to be just bloat which slows the system for no apparent purpose. This is speaking from experience with a LCII
Not that you'd want to run any version of 7.5 on an LCII period - 7.5 and 7.6 are very nice on an LCIII, but in my experience, rather sluggish on an LCII with 10MB of RAM.
If I was going to run 7.5 then i personally would go no further than 7.5.3, beyond that seems to be just bloat which slows the system for no apparent purpose. This is speaking from experience with a LCII