No, wait, it's the old 8-character limit on the file name. I don't think you're correct. CONFIG.BACKUP → short name: CONFIG.B~KEvery time the text editor saves a file it writes a .bak file for the file being edited so it's the last edit which might have overwritten a change you want to keep.
It is much safer to manage the backups yourself by copying the good file to a numbered backup.
Check the contents of the file using the command "more config.bak" to see what's in it.
This is the thingTypo on line 2 in config.sys:
DEVICE=C:\SB16\DRV\\CTSB16.SYS /UNIT=0/BLASTER=A:220 I:5 D:1 H:3
Should be:
DEVICE=C:\SB16\DRV\CTSB16.SYS /UNIT=0/BLASTER=A:220 I:5 D:1 H:3
I can't remember if it all has to be on one line if it is allowed to be on multiple lines.

I already put it all on one line as you mentioned.FILES=40 is the maximum number of file handles that can be open in DOS.
This may have been added by the Windows 98 loader. I can't remember. It has been over 25 years.
The device command might have been written by the SoundBlaster diagnostic program.
I would definitely put the device command all on one line:
DEVICE=C:\SB16\DRV\CTSB16.SYS /UNIT=0/BLASTER=A:220 I:5 D:1 H:3
Reboot and then test.
A handy command to order the files by directory first in autoexec.bat is:
SET DIRCMD=/OGN
Which can still be used to this day for the Windows 10 command prompt!

Yes I think this is what’s occurred …Were you using a 5 pin DIN keyboard previously and now using a PS/2 keyboard?
If so I would power off the machine and disconnect the PS/2 keyboard and go back to what you were using previously.
I don't think a PS/2 keyboard would cause a DMA or IRQ conflict with the soundcard.