Hi, corrytonapple -
Also, when I hold down option at startup, it goes to the screen with the blue background and only shows the disk last booted into.
That's correct. One of the flaws in the design of Startup Manager (which is what opens when you boot or restart with Option held down) is that for a volume with multiple OS's on it (such as both OS 9 and OSX), it will display as a choice for that volume only the OS last used for normal booting.
Article #HT1310 - Startup Manager: How to Select a Startup Volume
There is a work-around type solution for those who want to be able to choose which OS to use at startup. Set Startup Disk in both OSX and OS 9 to use OS 9; this sets OS 9 in PRAM as the OS to be used for booting. Then whenever you boot normally, the machine will boot into OS 9; when you want to boot into OSX, simply press the X key at or just before the startup chimes sound and keep it held down - this will force the machine to boot using OSX - but it is a one-off event; it will not change the preset for OS 9 in PRAM.
Of course, this is viable only when both OS's are addressable and usable.
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....then when it shows the gray apple and the loading icon it stops, freezes, and up in the top, left hand corner it says "no admin password" and stays frozen.
Someone else will need to address that issue. I don't use OSX (yet), so do not have sufficient knowledge of its workings to attempt to trouble shoot that.
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Re the eMac and getting back to OS 9, the only two ways to do that in your situation (OSX set as boot OS but unusable) are the technique Niel mentioned (which is the only keyboard command available to switch OS's) and the one I suggested (which requires a bootable optical disk).
Re what Niel suggested, be sure you hold down all four of those keys (Command-Option-Shift-Delete) simultaneously at or just before the startup chimes sound, and keep them held down until the machine has started to boot to an OS. This is an instruction to the Mac to ignore the OS preset in PRAM and to boot to the next available OS it finds. Note that the "Delete" key to be used is the large one two rows above "Return", not the smaller one in the array above the arrow keys.
If it still doesn't work, repeat, but use the Command, Option, and Shift keys on the left side of the keyboard (takes two hands for this) - sometimes one set will work when the other does not. And, Capslock is not a substitute for holding down Shift when it comes to keyboard commands.