What you're after for the screen resolution is the Screenmode preferences editor. It should be in your "System" or "Workbench" volume under the "Prefs" directory. If your machine has a 2nd video plug, it might have an add-in video card, so when you're in Screenmode, look for video modes that would give you higher resolution and more colours.
As for making the machine useful, I guess it depends on what you want to do and how much you want to spend.. you can add accelerators to speed it up, more ram (always good!) and bigger and faster hard drives.
You're probably best sticking with the native Amiga OS on that machine, you could run Linux or NetBSD or something on it if you're feeling brave, but you'd almost definitely want more ram and an accelerator in that case.
I don't know what options there are for Zorro network cards but I'm sure someone can make some suggestions..
:-D I know there used to be a card called the AriadneII (I think) that was supposed to be pretty good.
Hope this helps!