This is possible, but this is at the far edges of what is easily doable.
As one clarification - Classic Mode is not capable of doing its own file sharing, and, AppleShare IP Server cannot be run in Classic Mode, so this is right out as a way to get better filesystem support or disk hardware support for classic server applications.
You have to use OS X based server software.
However, this might still work and be reasonable. 10.2 can definitely and 10.3/4 have varying ability to speak with older OSes. TCP/IP is better but 10.3 and 10.4 can also both still talk the apples. (speak appleshare over appletalk to be converted to localtalk.)
Your G5 would need to be running 10.3 or 10.4, 10.3 would be better if you need to stick with system 6 or 7.1. An early G5 would be best for this, like, a single 1.6 would suit well for this. (Some very early G5s can run 10.2 but I don't know that I think there's a compelling reason to use 10.2 over 10.3 for this, at least if I'm remembering everything right. If I'm wrong though, then the first-gen G5 is your only choice and you have to run 10.2, I'll see if I can chase down that info.) 10.5 is definitely right out.
With 10.2/10.3 8TB volumes are supported and 10.4 supports 16TB volumes. However, I don' tknow what testing has been done in terms of putting bigger disks into PowerMac G5s. USB disks will work fine though.
What OS version is the IIsi running? Your options expand a bit if you can run 7.5.5 + opentransport/appleshare upgrades on it (or 7.6.1 with those) but I know that'll depend on what your process control application needs and how well lit responds to OT/AS upgrades, which are heavy-ish.
How many total concurrent connections do you need? OS X [client] has the same 10-client limit that OS 9 had, for every version that's relevant for this.
Other thoughts: What G3 do you have? If you have a blue-and-white, you could just use 2TB USB hard disks. I've run 2TB USB hard disks in OS 9 on my blue-and-white, iMac G3, and Power Mac G4. If LocalTalk is ultimately involved, then USB, while way slower than even a bad pata connection, will be "fine".
If you have a Mac with firewire, same deal, just, you can go buy a 2TB USB hard disk at best buy, firewire is a bit more complicated and it involves figuring out what disks had fw-sata bridges internally (lacie d2/quadra for example) and then installing newer disks to match your needs.