Inspiron 15R N5110 - Questions.

Hi All,
My dell laptop (Inspiron 15R N5110 - IntelCore i7-3670QM) purchased in 2012 (out-of-warranty) had some hard drive issue, few months back. I tried all the basic trouble shooting from my end, but no luck.

Issue : Switching on the laptop shows the Dell logo; post which it shows a blinking cursor gets displayed on the black screen. Windows wouldn't load up and cursor keeps on blinking.

Troubleshooting: Tried all the below troubleshooting; but no luck.
1. Removed all connected external components from the laptop (USB; Charger etc). Removed and Reinserted the battery. Tried switchin ON & OFF couple of times. No use.
2. Removed the battery and charger. Pressed the power button continously for 30 seconds or more. Connected to the battery or adapter (without battery). Tried swicting ON. No Use.
3. Pressed F2 and changed the BIOS settings to boot from HD. No use.
4. Pressed F12 and ran the Diagnostics. Basic Test was successful. Thorough Test revealed the following
Error Code 2000-0142
Validation 7501
Msg: Hard Drive 0 - S/N 12*******, self test unsuccessful. Status = 7
The given error code and message can be used by Dell Technical Support to help diagnose the problem.
5. Tried reinstalling Windows, using bootable USB recovery drive. This re-installed Windows, but had no luck when trying to login to the laptop. Still same issue.

Conclusion : After all these attempts, I believe my Hard Drive is corrupted and am planning to replace it.

Questions :
1. Is there anything that I am missing in my troubleshooting steps? Or Should I proceed further in buying the new hard drive?
2. I am planning to buy following hard drive (Western Digital 250GB 7200RPM SATA Drive - WD2500LPLX). My laptop came with 500GB 5400RPM SATA Drive (500, S2, 5.4, P11, 2.5, TSHBA-3A), originally. Anyone know any issues with this internal hard drive or would you recommend anything else?
3. What are the available OS that I can buy and install? My laptop came with Windows 7 Home Premium 64 bit SP1. Can I go for Windows 10 OS?

Thanks in advance for your response.