But isn't Windows 95 not allowed to be used unless you purchase a license?
Technically yes.
Legally Microsoft has the absolute right to stop people hosting Windows 95's files for download/re-distribution. I'm guessing they choose not to since it is not-for-profit, and the cost of going after violators will be more than they make from sales.
The first three digits didn't matter, the second portion needed to be evenly divisible by 7. In highschool I worked the summer setting up computers and we would just make them up. After a couple summers and some technology upgrades I doubt there was a legitimate CD key in that school.