I would not back up important data to another partition during reinstall as it is not a fully reliable back up method. Back it up externally to HD, stick, DVD's, another computer on the network or to Skydrive which offers 15gb free storage with each Windows Live ID.
Under the EULA you can use either 32-bit or 64-bit Windows 7 with each license no matter what HP tells you, as long as you can find the drivers for any devices which are not provided by the installer and then quickly updated by optional Windows Updates.
Offline Activation means that it is currently using factory OEM-SLP activation method. When you use the Product key on COA sticker that changes to OEM-COA method which is managed in MS Servers. It often requires a quick robo-call to MS to record the hardware config in their servers for your key.
Follow these steps to get a perfect factory OEM clean reinstall, based on thousands we've helped with here:
Reinstalling Windows 7