New hard drive installed to XPS 435t, things going downhill ever since

My original hard drive wouldn't boot, we ran Startup Repair for hours.  Finally ran the system assessment tool and it failed the drive.  Went out and bought a replacement drive, installed it.  The new drive is a SSHD (hybrid SSD and Hard drive).  I'd been making system image backups using Windows Backup, so I inserted the System Repair disk created in 2013 and had it put the image on the hard drive.  It created a recovery partition that was NTFS as well as the C drive partition, also NTFS.  So, first question, is that recovery patron supposed to be NTFS or Fat32?  Does it matter?

The reason I ask is that initially things seemed to be fine.  However, I got continual complaints about not running Genuine Windows, even though it showed as activated.  Also, I couldn't run Windows Update.  At all.  Worked with Microsoft on those issues repeatedly.  Seemed to get Update fixed, but then started having problems with patches causing restart problems and more Genuine Windows errors.  Decided to return to factory condition, using disks created with Dell Data Safe when I first unpacked the PC on 2009.  Was excited to see it was creating the recovery partition.  However, on reboot, it now had yet another NTFS partition labeled Recovery, and the original one was now unallocated space.  And this new Recovery partition is not in the first position.  

Am thinking of just getting some partition software to merge the whole thing into one partition, but is this partition issue part of my Genuine Windows issue and/or my Update issues?  If I have the Dell disks initially received, do I need that parttion for anything?  If I do, how do I get it back at this point in the right format and position?  And if I have to create it separately, what is the right size?