1. Make sure you are installing the same version of Windows 7 that came with the Laptop. Otherwise activation will fail.
2. You have to make a proper bootable pendrive with Windows 7. ( Just extracting the ISO to the pendrive and trying to boot it will not work.)
3. Download the Universal USB Installer Universal USB Installer – Easy as 1 2 3 | USB Pen Drive Linux
and run it. Select Windows 7 Installer in the drop down menu, select your Windows 7 ISO, select your pendrive, select to format it to FAT32 and click on create.
4. Download all necessary drivers
from the DELL Support Site before starting the clean install.
5. When you install with a regular Windows 7 Installation Media, you will be required to activate using the COA key on the sticker of the laptop. May be you will be required to activate by phone.
All that said, I would suggest that you contact DELL Technical Support immediately
and they will promptly send you the OEM Reinstall Disk for which you are entitled.
Installation with OEM reinstall disk will preserve the OEM activation. So if you can wait for a day or two till you receive the disk, that would be preferable.
There will be no problem with Phone Activation per se, but I would still consider it an unnecessary botheration. It is upto you.