According to this FAQ from Microsoft (here):
Windows 7 Starter only comes preinstalled—mostly on netbooks—so you can't buy and install it on your own. It's designed for doing the basics, such as using the Internet, sending e‑mail, and creating documents.
This suggests that even if you do get installation media and edit the config file as discussed in your link, you still wouldn't have an installation that complies with the license terms since you'd still need a Windows 7 Starter product key.
Even if you were to obtain one, using it in a VM would not be license compliant, since per the quoted document, keys for Starter are only sold with hardware, and are likely OEM keys, meaning their use is only permitted with the hardware with which they were sold.
If your budget isn't absolute zero, you could potentially use Windows legally within an Azure virtual machine. These aren't free but are not too expensive, and the cost of the Windows license is included in the price you pay.
An alternative option would be to setup a Linux VM with a web server and a particular version of Ruby. You could quite easily set up an FTP or SSH server on these VMs for file transfer, and do your coding on the host machine's Windows install (I presume you have one Windows box already)