So, you want to boot from the 500GB drive, and reuse the 320GB drive as a backup?
If you only moved the data files to the 500Gb, you can't boot from it.
You'd either need to reinstall the OS, or clone the drive over.
Only once you've successfully got an OS to boot on the 500GB drive (and moved your data) would I even consider formatting the 320GB.
A clean install onto the 500GB would be my recommendation, and, if you have an active license key (you mention you don't?) you can download an ISO of the install media here:
https://www.microsoft.com/en-ca/software-download/windows7
Unfortunately, even with a legit key, you may not be able to download the ISO. I believe it's limited to retail versions, not OEM (as MS's view was you were to contact the system builder).
If you have no (or OEM) key, I would consider upgrading to Windows 10 (officially the "free" upgrade period is over, but it still seems to work).
Upgrade to Windows 10 and you'll activate with "digital entitlement". Then, you can clean install Windows 10 (skip when prompted for a key) and you'll re-activate when you get online.
You can download and create Windows 10 upgrade (and clean install media) here:
https://www.microsoft.com/en-ca/software-download/windows10
Once you have a 500GB drive that can successfully boot and you've migrated over your data, yes - you could then format the 320GB and use it as secondary storage.