Series of Unfortunate Events - From KB3004394 to lost product keys

Okay, so I'm in a very, for lack of a better word, "messy" situation right now. I'll try to make this easy to follow.

So, for a little while now, my father's computer has said it wasn't running Genuine Windows. When he finally mentioned it to me last month, I was afraid I had inadvertently deleted something or lost something while cloning the computer's original Seagate hard drive, which was showing signs of failing, to a brand new WD drive.

After fumbling around with ideas, I hooked both drives up to the computer and attempted to copy the system files from the old one (which was and still is functioning) to the new one. To avoid messing up my C:\Windows folder (the one I felt may have been affected), I copied it to the same location and named it WindowsNew. Then I copied the system files from the Seagate's Windows folder to the WindowsNew folder, and it seemed to copy alright. While booted off the old Seagate drive, I switched the names of the WD's Windows and WindowsNew to Windows (Original) and Windows, respectively, then booted off the WD. It booted just fine, but I think the files that refer to that Windows folder split themselves, so some referred to C:\Windows (Original) and others to the new C:\Windows. No matter what actually happened, Windows still wasn't genuine.

Frustrated, I searched around on the Interwebs and found out that Windows Update KB3004394 was issued to W7 SP1 Build 7601 (exactly what I have). That update apparently caused exactly what I was experiencing: Windows not believing it was genuine, even though it was. Elated that I'd found the problem, I found the KB3024777 fix for it, too. I downloaded and ran the fix and restarted Windows, only to find that it still thought it wasn't genuine. So, I continued searching.

I went to Installed Updates and looked and searched for KB3004394 in hopes that I could delete it that way, but it was no where to be found. Despite this, Windows Update hadn't been updating since the exact day KB3004394 would've been downloaded to the computer. I figured it couldn't be a fluke, so I searched again for a solution to no avail.

I ended up contacting Microsoft, and they confirmed that Windows was genuine. The activation code in Control Panel>System was there and said so! The Lauren dude at Microsoft tried recommending that I buy Windows 8.1, but why would I do that when 10 will be free once it's released? After pointing that out to him, he told me to contact the manufacturer for a reinstallation disk, so I did. Dell sent it free-of-charge.

After a few days of waiting, it finally arrived on Tuesday (6/16/15), so I threw it in the computer. Not wanting to have to backup everything, I attempted to Upgrade to the same OS, but it turned back results that it needed to rename the C:\Windows folder. This left me asking myself, "If it has to do that AND has to be booted from where I'm installing it, how does it ever work?"

Confused, I tried hopelessly to rename C:\Windows, but I knew no matter how much of the computer may have been running off of C:Windows (Original), it wouldn't do it because files were "open in another program."

My essential files are backed up to Carbonite, so I decided a hard reinstall wouldn't hurt. I have the product key for Windows itself, but I seem to have misplaced the key for Office 2010. Not losing hope, I tried Magic Jelly Bean, but the Windows Product Key it showed did NOT match the one on the case of the desktop, and a thread elsewhere said that MJB doesn't work for Office 2010. Another key-finding program went as far as saying the Office key wasn't even in the registry!

So now I'm here. I'm afraid I'll lose something important of my parents' that Carbonite didn't back up if I do a hard reinstall, so if Upgrade is somehow still an option, YES PLEASE. If not, will I have to recall how we installed Office 2010 four or five years ago and find the product key so I can do a hard reinstall without losing Office?

I didn't mean to write a small novel on the forums, but I can't even identify the base problem! Sorry and thanks in advance!

That is very, very difficult to read as one large paragraph.

Please go back and edit it and break it up so it's readable, otherwise most folk here will take one look and move on.