>Maybe I would be better of buying a new drive. However would a new drive connect to the atari?
A new drive will usually connect to the Atari. However, you will need an IDE adapter, which isn't cheap (unless you have a Falcon). I'd suggest hunting for another used SCSI drive.
>Since I only have 4Mb of ram are there many things I can do with a revived system? Could I for example run some linux software through mint or another alternative os?
You would not be able to run much on 4MB except perhaps Magic or Geneva. Both are improvements over basic TOS. The added space would be useful mostly for storage. (Of course, you could rip your CDs in WAV format [about 10Mb/min.] and use the Atari as a big iPod!) :-)