should C:\ drive be a partition for only for OS W7?

Regardless of what you decide doing. Buy an External HDD that will hold all data now and leave room for future.
Backup your data to that drive as often as possible. With only one drive, you WILL lose it all one day.

You can create a second partition. You can do Shrink and Resizing. but if possible, it is best to backup all your data and start from scratch, and create the number and size of partitions you want from the start.

You can use any partitioning tool, but you don't need them if you start from scratch, and 7 has a Shrink Partition function if you want to go that route. I personally don't recommend any Shrink/resizing apps. This can be debated to death. Yes, they work, but they can also cause problems. If you back up your data, then I say use them,, it can save you time in the long run, but if you do not have a backup, you can and most likely will lose it all if something goes wrong or you make a mistake..

You will want (depending on the amount of software, games, etc) a good size OS Partition. Personally I wouldn't make an OS Partition smaller than 100G. You will regret having too small a partition later. You also do need to leave free space for defrag and other apps they may need the free space temporarily.

There is a lot more to partitioning drives properly, than just grabbing a drive and chopping it up.
You do need to plan how you are going to be using the drive and how much of it you really will need now and in the future. Or trust me, you will doing it all over again.

Generally,, 100G to 150G should be enough.
Many will argue to death about this, but, I say choose at your own peril.
Drive space is cheap, why limit yourself.

Yes, you can recover only the C: Drive (a.k.a. OS Drive) and not touch the D: Drive (a.k.a. Data Drive)

Again, if you don't have an off line backup (a.k.a. files also stored on an external hard drive [a.k.a. External HDD]), be prepared, that if you do make a mistake that you can lose all your data, and also that if the drive goes bad, so does the data on both partitions.

With all that said.....
With drives so cheap now. There is almost no reason to multi-partition a drive anymore.
You should do 2 things,.,..

If money is an issue, leave it as is right now and get an Internal Drive when you can.
You have roughly a 500G now, get a 1TB or more and install that as the second drive
If the 500 goes out, then you wont lose all your data,, just replace it and reload the OS.
If the other drive does,, well,, see first post about data backups.

Then get an External HDD of the same size or larger and backup your data regularly.

There are 2 groups of people.......
Those who have lost data, and those who will lose data, there is no inbetween.

All HDD's require some free space for different reasons...

One major reason is defrag. Defrag requires at minimum 15% to do a proper defrag.
So you need 6G of free space for defrag alone on a 40G HDD.