Once you audit the key from HD using keyfinder, Magical Jellybean or Belarc Advisor, reinsert it at Control Panel>System>Change Product Key.
This may require a robocall to MS during re-activation to sort the actual key from a batch key, but this is no problem normally.
If this fails or is unavailable, reset activation and remove error message by doing a Repair Install
It seems unusual that the COA sticker on a Windows 7 machine would be worn or faded so quickly. However since it would be less than a year old, you still have manufacturer's tech support which should also help you recover your system and reactivate.