From the screenshots it has Workbench 2.04 and Kickstart 37.299.
1) I intend to add a 2.5" 180MB HD in the internal slot, will this work? If not what do I need to do to be able to do so?
You need Kickstart 37.300 or 37.350 to use a HDD. The 37.299's IDE driver is not able to boot from HDD. When changing Kickstarts, you should consider to upgrade to the latest version (3.1 / 40.63).
2) I need to be able to use CrossDos to read 720k PC formatted disks (in order to copy compressed adf's at work) does my workbench have this? If not what can I do to be able to do this?
Insert the Extras disk, open Extras/Storage/DosDrivers and run PC0.
Bye,
Thomas