I believe System Reserved partition supports Bitlocker. If you are using Bitlocker then I would leave it in place or try moving it to DISK0 after making a Windows 7 backup image so you have a path back.
The way I would move it is to use free Partition Wizard bootable CD
. Rightclick Windows 7>Resize then slide border over to make space for SysReserved partition, OK.
Now rightclick SysReserved>Copy to new space created for it, OK. Then delete original SysReserved partition, OK, Apply all Steps.
If necessary, boot Windows 7 DVD repair console, click through to Startup Repair to run up to 3 separate times with reboots to repair or rewrite the MBR onto DISK0.