You can't make a drive work faster than it's inherent capabilities.
If you system supports Intel Rapid Storage, you can buy a small, 20-60GB SSD and us that as a caching drive to improve performance.
5,400 RPM drives are the slowest drives in the industry, unfortunately.
As for fragmentation, imagine writing 3 files of 1,000 bytes. then delete the 2nd one. now there is a 1,000 butes gap between the other 2. If you now write a 500 byte file, then it may go in the gap. If you next write another 1,000 byte file, it won't fit in the gap and there will be fragmentation.
That's highly simplified, but just to give you an idea.