Hi clivemacd, welcome to the Forum.
No it's not a stupid question. System Restore Points are kept on your main Windows 7 Hard Drive, which is fine as long as the drive keeps working, but if it has a major failure you lose your System Restore Points & everything else. So having a image back up on a separate drive is essential if you value your data.
I use Macrium Reflect, as a lot of others on the Forum do, & I do a weekly image of my main drive. I also have a boot disc which you can create with Macrium to get the computer booted up to install the backed up image to a new hard drive. Normally this would take probably about half an hour & then I am virtually back where I was immediately before the old hard drive failed.