We are experiencing same issue as well. Windows 7 32bit showing 2.5GB usable memory.
I ran some tools in Windows and it seems video (Intel HD Graphics 520) is taking 1GB of system memory.
After researching Intel HD 520 online I found that it does not have its own dedicated memory or eDRAM, so it is forced to pull memory from the system reducing the total system memory. This would not seem to be as much of an issue if a 64bit OS was being used but its still taking a lot of memory even for 64bit.
Unfortunately Dell does not allow the amount of allocated memory for the Intel HD 520 to be changed in the BIOS.
It seems with this laptop/CPU/Graphics setup you will be forced to use 64bit OS unless Dell has another solution.
From what I have read it seems that the Intel HD 500 series chips all pull from system memory. The Intel Iris 500 series chips have dedicated memory and eDRAM so they shouldn't pull as much from system memory but Intel does claim the Iris chips can also pull from system memory as well.
Although, installing 2 DIMM's might alleviate some performance issues and may allocate memory better for video as well, I have not tried this and it is a shot in the dark.